Rising energy prices to cost European produce industry $6.7B - Freshfel

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Rising energy prices to cost European produce industry $6.7B - Freshfel

The European Fresh Producer Association (Freshfel) is urging authorities to apply palliative measures to minimize the consequences of the energy crisis for the fresh produce sector. 

The unprecedented soar in electricity and gas prices is causing businesses to face serious economic hardship and even bankruptcy, it says.

Rising prices of production inputs, such as logistics, can no longer be absorbed in the chain due to short margins. So far, the spike in costs has not been passed down to consumers, according to Freshfel. 

However, it says that retail prices of other food sectors have recently inflated by 15 to 20%, passing these added charges to shoppers.

“We are estimating the sector’s added energy costs to be around €6.8 billion [US$6.7 billion] for the current season from orchards up to departure of fresh produce at packing stations. Besides this, each product category might also have additional energy costs in the chain,” said Philippe Binard, Freshfel Europe general delegate.

Fresh produce operators face different challenges, as their energy dependency varies. For example, outdoor production requires electricity for proper irrigation, while indoor production requires temperature management and appropriate lighting. 

As for packing and storage facilities, they need to have a temperature controlled atmosphere, as do ripening plants. And of course, logistics and transportation require energy as well. 

Equally, distribution centers and retailers need to be able to ensure safe food conditions to consumers.

Along with production aspects, product freshness, quality, and safety may also be at risk. Without a proper temperature-controlled storage, microbiological contamination risk will be heightened if cold chains are cut.

Freshfel is urging regional, national and European decision makers to consider all necessary actions to assist the industry during these difficult times. 

The organization has identified key steps to be taken as soon as possible, such as securing exemption of fruit and vegetables from potential energy cuts to ensure quality and safety of produce.

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