EU: Restoring confidence in fresh produce
As the EU Agriculture Ministers are coming together to discuss compensations for the fresh produce sector in the light of the ongoing uncertainty related to the E.coli outbreak in Germany, Freshfel Europe is reminding authorities that the current crisis is affecting the entire fresh produce supply chain and that immediate communication and promotion actions should be taken to restore consumer confidence.
Since Thursday 26 May 2011, the European fresh produce sector is exposed to an unprecedented and devastating market situation as a result of the EHEC outbreak. Operators across the chain are confronted with a disruptive market situation affecting most of the fresh vegetables and including some fruit as well. Last week in some Member States sales of cucumbers were down by 80 to 100%, sales of tomatoes by 50 to 80% and lettuce over 50%. Such a situation prevailed in many European markets affecting volumes and also prices.
The perishable nature of fresh vegetables is further exasperating the situation. Preventive withdrawals and/or in-store destruction by operators of unsold volume are often the only solution. The partial or complete ban imposed by third countries upon European fresh vegetables since the end of last week is aggravating the pressure on the collapsing European fresh produce market. Finally, this crisis is deeply and unfairly affecting in consumers’ mind the image of fresh produce. Rebuilding this image will be a costly and timely task and the sector is not in a position to undertake this effort on its own.
As the EU Agriculture Ministers and the European Commission are considering actions to remedy this exceptional situation, Freshfel warned the European Commissioner for Agriculture Dacian Ciolos in a letter dated 6th June 2011 about the far reaching implications of the current situation for all operators and consumers. Freshfel consequently called for market measures and to include the restoration of consumer confidence in the package of measures.
Ramon Rey, President of Freshfel Europe, stated: “We urge the Commission to consider a comprehensive package to compensate some of the heavy losses suffered by the fresh produce sector, and welcome the first steps with proposals to compensate growers. These much demanded measures might alleviate the severity of the situation for those producers. However, it is to be reminded that this crisis is unfortunately not only damaging the production but also has a significant impact upon a wide range of operators across the chain, including packers/shippers, wholesalers, importers and exporters, logistics providers and retailers, etc.” Cancellations of programmes, return of unsold products, lower prices in saturated markets, withdrawal/destruction of products, as well as infrastructure and workforce not used at full capacity are some of the immediate damages suffered by operators in the supply chain.
Pending the clarification of the source of the outbreak which should remain a priority, the long term image of fresh vegetables is at stake. It will have a long lasting impact on the sales of fresh produce affecting significantly business’s turnover for several months. This crisis will not be overcome by the sector if a strong communication and promotion campaign is not undertaken towards European consumers. Ramon Rey added: “We would favour the implementation of a fast track European generic promotion/communication campaign focusing on the benefits of consuming fresh produce (raw vegetables in particular). We estimate that 50-55 million € would be required to conduct such a large scale 3 weeks media campaign in the most affected Member States.” Given the need for a prompt action and the unique critical situation of this crisis for the sector, Freshfel considers that such an action should be financed in full under the EU budget, in close coordination with the sector. Such a plan is crucial to restore consumer confidence and stabilise the market and will benefit the entire supply chain from production down to retail.