Dutch food industry buckling under high energy costs: Trade association

A growing number of food producers in the Netherlands are facing financial difficulties due to the increased energy costs, trade association FNLI said to NOS. The FNLI called on the government to quickly present support for businesses.

Energy companies are increasingly reluctant to offer fixed-rate contracts, leaving more and more businesses with flexible or variable contracts, according to the FNLI. That is accelerating the burden of the rapidly increasing energy costs, especially for energy-intensive businesses like bakeries and canned food producers.

A recent study by ING showed that energy would make up an average of 7.5 percent of food producers’ costs this year. In 2020, that was 1.5 percent. “And we see outliers where the energy costs now account for about 30 to 40 percent of the cost price,” FNLI director Cees-Jan Adema said to the broadcaster.

On Budget Day last month, the Cabinet announced measures to boost citizens’ purchasing power and said it was working on a package for businesses, specifically energy-intensive SMEs. Adema called on the government to present those measures quickly, also to maintain fair competition with companies abroad.

“We see countries around us quickly setting up support measures. Dutch producers are falling behind as a result. Similar products from abroad are becoming cheaper,” Adema said. According to him, many businesses can’t pass on the higher energy costs to customers because they would then lose competitiveness, but they are also unable to bear the burden alone.