European fruit and vegetable market: “lack of demand from hotels and restaurants is driving prices down”

The coronavirus crisis is placing stress on Europe’s supply chains, with stockpiling leading to empty shelves, new border checks causing traffic jams for truckers, and fears of labour shortages (see Politico, 24 March). But according to Wouter Kolk, CEO for Europe of Ahold Delhaize, panic-buying is likely to subside within a week or two once people start trusting in the food supply again.

Fresh products like dairy, fruit and vegetables are the most sensitive to any disruption in the European Union’s finely tuned supply system. Philippe Binard of Freshfel, which represents the fresh produce industry in the EU, says that 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. The coronavirus crisis is also making it harder to hire seasonal workers to pick fruit and vegetables due to travel restrictions.

The UN Food and Agriculture Organization (FAO) has forecast “occasional shortages of certain products” such as vegetables, but crop price increases are not expected. For the moment, the main issue is not supply problems driving up prices, but the reverse: lack of demand from big sectors like hotels and restaurants is pushing prices down.

How to handle worker shortages is one of the top concerns for the supply chain. It is crucial for workers to adopt social distancing measures so that the virus does not reach factory floors, which could lead to companies having to shut down and sanitise entire facilities. Another potential hurdle is if workers decide to protest over new measures.

National border measures last week led to traffic jams stretching for more than 80 km at some crossings, although the situation has eased since then. On Monday the European Commission published guidelines saying EU countries should immediately implement “green lanes” to expedite the transportation of goods. However, some governments have been applying the measure extremely strictly, allowing trucks with food to go through, but at the same time delaying transport of raw materials or packaging materials.