Patchwork energy prioritisation risks food chain disruption, industry warns

EU countries’ lack of cohesion in prioritising the agri-food sector for gas supply is sparking concerns of market disruptions among industry stakeholders while experts stress member states must coordinate to ensure consistency. 

With winter approaching, Moscow’s interruptions of gas flows to Europe and the ongoing energy crisis could mean supply shortages, prompting debates on which industries should be prioritised in such an eventuality.

According to the European Commission, this decision ultimately rests with member states – but this uncoordinated approach has sparked fears in the agri-food sector.

“We are already seeing that (ongoing) national discussions about prioritisation are going in different directions,” Dirk Jacobs, director general of FoodDrinkEurope, representing the EU food industry, told EURACTIV.

Different interpretations of ‘essentiality’ “risks causing problems for the proper functioning of food supply chains,” the association warned in a letter addressed to Commission President Ursula von der Leyen and the Czech chair of the Presidency of the Council of the EU on Monday (26 September).

As such, the organisation calls on decision-makers to ensure that EU member states pay special attention to not “unintentionally jeopardise food security and availability in the context of the energy crisis.”

Commission: Prioritising agri-food sector in gas crisis is up to EU countries

Member state and industry representatives want better protection for the EU food and agriculture sector against potential gas shortages this winter, while the European Commission has pointed back to member states’ responsibility on the matter.

But as Simone Tagliapietra, a senior fellow at the economic think-tank Bruegel, explained, determining which industries will be considered strategic for society, and thus prioritised in case of energy shortages, is a prerogative of the EU member states.

“It is understandable that these kinds of things are done by the national government,” he told EURACTIV, explaining that each country is responsible for drawing up a contingency plan setting out these decisions according to its own criteria.

However, he stressed that member states must coordinate these plans to ensure consistency and avoid compromising the level playing field within the EU common market.

While Tagliapietra pointed out that Commission has already asked member states to do this, he said this is something they “can certainly do better on”.

As the letter from FoodDrinkEurope points out, thanks to its reliance on processes such as heating, cooling and freezing in a continuous cycle, the food sector is by definition energy-intensive, leaving it particularly vulnerable to shortages. 

Should the food and drink sector be asked to cut electricity consumption during peak hours, this would therefore have “serious consequences for food safety, food waste and – ultimately – availability,” the letter warns.

EU fruit, vegetable producers scramble to save harvest as energy prices soar

Soaring energy bills have sent the EU’s horticulture sector scrambling to save their produce just as harvest time hits, leaving some debating whether to simply leave their crops to rot – and even whether to continue growing in the future.

Meanwhile, the vast majority of operations work across borders and are highly interdependent with related sectors, such as raw materials, feed, packaging, and processing equipment.

“Given the interdependencies between sectors, the entire agri-food chain needs to be prioritised, and all agri-food industries suffering from the crisis should be covered by supporting measures such as subsidy scheme,” the letter urges. 

For instance, if the food packaging sector in a country is not prioritised in terms of ensuring the supply of gas or electricity, it could “potentially lead to disruptions in the supply of packaging to other countries (due to production cuts), creating a knock-on effect in the chain,” Jacobs explained. 

In a recent interview with EURACTIV France, Christine Lambert, newly reelected chief of EU agriculture association COPA-COGECA, also said the food and agriculture sector should be prioritised in terms of energy supply.

“The agri-food sector is strategic: it cannot go without energy,” she stressed.

Previously asked by EURACTIV, a Commission spokesperson pointed to the EU Executive’s Commission ‘Save Gas for a Safe Winter‘ communication, published in July, which specifically mentions the food sector as part of those “societally critical” gas customers member states could choose to protect.

However, the communication also urges member states and industries to prioritise saving gas and reducing demand to avoid shortages in the first place.

This point was echoed by Tagliapietra, who said national contingency plans would only come into action if a country has implemented all possible demand reduction measures and is still not able to provide sufficient gas.

EU food companies face closure as they buckle under strain of energy crisis

EU agri-food companies are struggling to maintain operations amid mounting energy prices, with some faced with pausing production, laying off staff or going out of business altogether, according to a joint statement issued by the EU’s major food sector associations.

[Edited by Alice Taylor]

Read more with Euractiv

Political leaders unprepared for rising inflation, French supermarket mogul says

Political leaders were ill-prepared to deal with rising prices while combatting opportunistic inflation should be a priority in the months ahead, Michel-Edouard Leclerc, president of the E. Leclerc cooperative, one of the largest supermarket chains in France, said in an interview with EURACTIV.