The French companies preparing ready-to-use fresh fruit and vegetables, united within the Syndicate of Manufacturers of Ready-to-use Fresh Plant Products (SVFPE), are warning their retail and restaurant clients of the serious difficulties the sector is faced with due to the vertiginous and generalized rise in production costs. The conflict in Ukraine has accentuated the increase in prices for all costs, both agricultural and industrial. The growing number of unpredictable weather phenomena also threatens the sustainability of the French production and some professionals might end up abandoning their crops. The number of French producers has already dropped by 10% and the cultivated areas for this sector have been reduced by 4.5% between 2019 and 2020.
If prices do not evolve very soon, the remaining French producers will be faced with major difficulties in terms of economic balance in the coming months, while others will be forced to abandon their activity. It is the responsibility of processing companies (within SVFPE), retailers and caterers to support the diversity of the French agricultural production and to contribute to the resilience of the French food industry.
In line with the Charter signed on March 31st under the aegis of the French government, SVFPE is asking retailers and restaurants to:
• Respond positively to the request from companies to activate the indexation clauses, regardless of their expiry date,
• Respond positively to the request from companies to reopen negotiations, also when the criteria for automatic review and renegotiation clauses are not met,
• Take into account the requests for higher prices on store brands and products intended for commercial and collective catering.
Second disastrous wave of inflation for the sector
At the end of 2021 already, French producers were asking all players of the chain to revalue their work in order to ensure their survival, given the current inflation marked by an increase in production costs (inputs, energy, packaging, transport), as well as labor costs and the difficulties related to the shortage of workers. With the conflict in Ukraine, the sector is currently entering a second inflation wave which is violent, with soaring prices on all components of the production costs, both agricultural and industrial. These additional costs, together with the growing numbers of weather hazards, are the source of great concern.
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