stifled by rising energy prices, manufacturers are asking for state aid

Faced with the rise of their production costs, the destruction of their margins and investment capacity, the manufacturers of the agri-food sector have been concerned and challenged the public authorities for more than a year now. But at the start of the 2022 school year, their cry of alarm is especially piercing, to the point of discussing the risks of production disruptions.

“We are facing a situation that has not been seen for more than 40 years, a real paradigm shift for our food supply chains, based on a stable and abundant a world that has been lost”, sums up Dominique Chargé, President of La Cooperation Agricole, which brings together about 2,200 French cooperatives in agriculture and agri-food.

In question, not only the health crisis and then the war in Ukraine, which seriously disturbed the flows and therefore the prices of world trade, but also global warming and extreme meteorological events, which in recent months have affected yields in France. some agricultural sectors. Result: a decrease in the availability of raw materials, not only in agriculture, and running inflation that is more and often unbalanced the accounts of industrialists.

The risk of shortage of some products on the shelves

For a few months, it is particularly the “wall of energy”, “impassable”, which shocked the French food industry, where energy often weighs on charges.

“The dairy giant Lactalis it is calculated that in 2023 his energy bills will double, reaching 1 billion euros. The Sill dairy group plans an increase of 800% between 2021 and 2023″, says the president and general manager of the National Federation of the dairy industry (Fnil), François-Xavier Huard, who recalls that “no one indicates stabilization” , quite the opposite .

“Such shortages cannot be absorbed. This leads to the closure of production units”, Dominique Chargé warned, stressing that in some sectors technical redundancies must be made.

But when manufacturers process perishable products, any interruption in the flow leads to significant food waste, as well as a risk of scarcity of some products on the shelves, he recalled. Especially because, for some producers, reducing references can be a way to save energy, added the president of La Cooperation Agricole.

A sector that needs recognition as of general interest

So the manufacturers asked for help from the public authorities, whose answers so far have not been considered up to par. They particularly insist on the need that, if energy rationing occurs, the agrifood industry will be exempted from it as a sector that responds to the general interest.

“Milk producers can reduce their energy consumption by a maximum of 5% without interrupting their activity. Beyond that, we can no longer guarantee the continuity of milk collection”, warns Francois-Xavier Huard.

They also asked for a review “fast” in the criteria of aid scheme for companies where the electricity bill weighs more than 3% of the turnover, which was set up in the spring by the government. On Monday, at the RMC, the Minister Delegate for SMEs, Olivia Grégoire, acknowledged that, due to its complexity, “almost 50 million euros of aid out of 3 billion have been given”. So he promised simplification.

The Agricultural Cooperation, together with Fnil, is still calling “the construction of a more efficient energy shield”, to protect agri-food companies “in the same way as individuals”. In the longer term, manufacturers also want more help and simpler methods to invest in silence and decarbonization of their activities.

Trade negotiations are considered more appropriate

the “paradigm shift” faced by the entire food chain, however, requires a “adaptation of all actors”, believes Dominique Chargé, referring especially to mass distribution, which has been accused for months by manufacturers of refusing their requests to raise their prices.

“Since March, we have obtained almost half of the increases that we asked the distributors… and if the negotiations are successful, which is not always the case. It consists only of the increase in agricultural raw material” , calculated Francois-Xavier Huard.

So manufacturers are asking now “the indexation of energy costs in
fixing the prices of food products”, as well as “changing the temporality of trade negotiations” –now governed by law that sets an annual appointment with a deadline of March 1st, in order to “to be able to revise the tariffs according to the inflation or the deflation of the costs of production”, several times a year. They also criticized the excessive duration of the deadlines for the implementation of the distributors of the newly negotiated tariffs, which put the manufacturers in critical cash flow situations, as well as the abuse of their part in logistics. sanctions, which require their eyes on a moratorium.

By calling distributors to demonstrate “responsibility” “not only to consumers, but also to their suppliers”La Cooperation Agricole also offers development, “in addition to the future agricultural orientation law”, in one “Pact of sovereignty between food chain actors, public authorities and consumers”. He hopes that it will be possible to adapt supply chains to “new paradigm”, and ensure the wages of all their actors.