How Europe will keep food on the shelves
Europe won’t starve because of the coronavirus, but the epidemic is making it harder to get your pasta and fresh fruit to the grocery store shelves.
Even before countries announced lockdowns to try to contain the spread of the global pandemic, panic-buyers stripped the shelves bare of staple foods and toilet rolls. Politicians from German Chancellor Angela Merkel to the EU’s agriculture commissioner are rushing to reassure consumers that there is plenty of food out there, and that the real problem is unnecessary stockpiling.
Without doubt, the crisis has piled stress onto Europe’s supply chains with new border checks causing traffic jams for truckers, fears of labor shortages if workers fall ill or are unable to travel, and supermarket cashiers threatening to strike over their new working conditions.
Those challenges don’t mean Europe will run out of food, just that it may take longer for shelves to be restocked, and new pressures may force politicians and producers alike to rethink operations.
“All our food is getting to the warehouses — with delays — but it’s getting there,” said Bart Vandewaetere, vice president for government relations at Nestlé, the world’s largest food company.
“It’s all crisis management right now,” said David Coleman, vice president of EU public affairs at Mars Inc., the U.S. food company. But “it’s highly unlikely that we’ll run out of food,” he added.
Here are four things to keep in mind during your next trip to the grocery store.
Plenty of pasta (and much more)
Dry goods like pasta are a favorite of stock pilers across Europe due to their long shelf life, but Luigi Cristiano Laurenza of Italian food industry body Unione Italiana Food said there was no need to worry if it’s currently scarce in stores.
“We’re not going to run out of pasta,” he stressed.
National border controls imposed last week in various countries to try to keep the virus out (Italy’s Alpine borders were particular bottlenecks) initially caused problems for intra-European pasta shipments, but major problems were resolved quickly, he said.
Still, certain fresh products like dairy, fruits and vegetables are more sensitive to any disruption in the EU’s finely tuned supply system. While “there is no big risk of running out of stocks,” extra hygiene precautions, such as implementing social-distancing at packaging facilities, may slow supplies, said Philippe Binard from Freshfel, which represents the fresh produce industry in the EU.
The coronavirus crisis is also making it harder to hire seasonal workers to pick fruit and vegetables due to travel restrictions.
“This is true all around Europe,” Binard said. But he added: “I’m confident there will be solutions to that and that we will secure the supply of fruit and vegetables.”
The U.N. Food and Agriculture Organization has forecast “occasional shortages of certain products” such as vegetables, but crop price increases are not expected, according to Abdolreza Abbassian, a senior economist at the U.N.’s Food and Agriculture Organization.
“This is the first time I’ve seen that prices are not the only thing that bother customers,” he said. “Their issue is: Do they get the food tomorrow? Will the supermarkets remain open?”
For the moment, the main issue is not supply problems driving up prices, but quite the reverse: Lack of demand from big sectors like hotels and restaurants is pushing prices down.
Since March 4, skimmed milk powder values have dropped from €2,300 per ton to less than €2,000 per ton.
“The only driver for that is COVID-19,” said Alexander Anton, the head of the European Dairy Association. Still, he noted that SMP output was related to strong demand, rather than weak. Skimmed milk powder (SMP) is a byproduct of butter production and shoppers have stocked up on butter during the COVID-19 outbreak, driving an increase in SMP supply.
Even so, continued supplies of milk and dairy products are “well assured,” Anton said. “The weak link is the workforce, not the raw milk.” One chocolate factory in France had to close recently “because it didn’t have the personnel,” Anton said.
Arnold Puech D’Alissac, a Normandy farmer and official in France’s FNSEA union said that strawberries and asparagus could rot in French fields this spring “because we have no workers and because [the prices] are too cheap.”
He said Spanish asparagus was selling at €2 a kilo in France — four times less than French varieties — in a plunge that he blamed on dismal market conditions in Spain.
When workers fall ill (or strike)
How to handle worker shortages is one of the top concerns for the supply chain.
Some dairy companies in Belgium have started training management-level workers to take over lower positions at processing sites in case of a shortage, said Anton from the European Dairy Association.
Scandinavian dairy giant Arla has also asked white-collar workers to be on standby to help at depots if the situation worsens, according to company CEO Peder Tuborgh. But “for now we believe that the industry is coping with the supply and demand,” he added.
Nestlé is putting an “extreme focus” on sanitizing its premises, company spokesperson Vandewaetere said. He added that it’s crucial for more people to adopt social-distancing measures pushed by governments and health officials so that the virus doesn’t reach factory floors. That could lead to companies having to shut down and sanitize entire facilities, which could mean further delays.
“It’s not just hypothetical, it can happen any moment,” Vandewaetere said.
Another potential hurdle is if workers decide to protest over new measures: Italy’s three main unions on Monday threatened to call a general strike due to disagreement over the government’s definition of “essential” activities that would be allowed to continue working through the coronavirus crisis.
Untangling traffic
National border measures last week led to traffic jams stretching for more than 80 kilometers at some crossings, though the situation has eased since then. Food and drink companies sounded the alarm on Thursday, warning that “our ability to provide food for all will depend on the preservation of the EU Single Market.”
The European Commission on Monday published guidelines saying EU countries should immediately implement so-called green lanes to expedite the transportation of goods. The guidelines state all trucks regardless of origin or destination should benefit, and also seek to minimize checks and paperwork for transport workers.
Nestlé’s Vandewaetere welcomed the push for green lanes, but cautioned that some governments were applying the measure “extremely strictly,” allowing trucks with food to go through, but at the same time delaying transports of raw materials or packaging materials.
One industry official listed a number of transit irregularities. These included the problems that Romania and Croatia had closed their borders to Italian trucks in a belief that they should be quarantined; truck drivers were forced into quarantine after entering “high risk” countries; and border guards in other EU countries had requested official documents from truck drivers that were not standardized in the EU.
A Commission spokesperson referred inquiries on a potential backup plan to keep the food on Europe’s plates to its “green lanes” guidelines. More discussions of such issues are likely to take place during a teleconference of EU agriculture ministers scheduled for Wednesday.
Easing panic
For shoppers, the bottom line from industry and politicians is not to panic.
Panic-buying is likely to subside within a week or two once people start trusting in the food supply again, according to Wouter Kolk, the CEO for Europe of Ahold Delhaize.
“What we see everywhere is that when it starts, and the government is taking measures … that’s when the run toward the supermarket starts,” said Kolk, whose company owns the Delhaize supermarket chain in Belgium and Albert Heijn stores in the Netherlands.
He added that the initial rush had created a “Christmas-like” impact on the supply chain.
“We see 50-60 percent, sometimes 100 percent, increases in demand. And our supply chain cannot respond to that immediately. That creates the shortages which create more panic … that creates even bigger storms.” But supermarkets have quickly filled the shortages, he added.
“There’s no need to be worried, to panic,” European Agriculture Commissioner Janusz Wojciechowski told PAP news agency. “We won’t run out of food.”
Hanne Cokelaere contributed reporting.
CORRECTION: A previous version of this article misstated Wouter Kolk’s title. He is Ahold Delhaize CEO for Europe.
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