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Fevia plans a second wave of price increases

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A second wave of rising food prices will come next year, Fevia, the Belgian food industry federation, has warned. This increase will be fueled in particular by wage indexation.

Companies in the sector have not been spared in recent months by the consequences of the war in Ukraine. Soaring energy prices, logistical problems and rising raw material prices have pushed the increases production costs and therefore, at the end of the chain, prices for consumers. In November, food prices were thus 15% higher than a year ago.

And Fevia does not see the situation improving in the short term. A quarter of companies in the sector, which consumes a lot of energy, see their fixed energy contracts expire and will therefore have to conclude new contracts, this time variable, which could in some cases multiply the costs by a factor of three or four. The sector will also have to digest wage indexation expected on January 1 and which should be around 11%.

To this are added certain contracts that must be re-negotiated with suppliers. “Suppliers who have respected their contracts and suffered during the year will now be able to substantially increase their prices”, explains the president of Fevia, Anthony Botelberge for whom inflation must still come on the market.

Fevia complains, within the food chain, to be the link which bears the heaviest burden and points the finger retail behavioraccused in particular of not wanting to assume a “fair” share of the cost increases.

All this weighs on the profitability of companies in the food sector, and therefore on investment projects and employment in the sector, according to Fevia, which calls on the federal government to take additional measures in the face of wage and energy costs.

The authorities are also called upon to tackle the “unfair practices” within the chain. Fevia thinks of those supermarkets that abusively “delist” products during negotiations or inflict “enormous fines” following delivery delays due to unforeseen circumstances.

The Belgian food industry has more than 4,000 companies, which employ 98,000 people and achieve a turnover of 61 billion euros.

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