The never-before-seen energy price developments are creating a highly uncertain future for vegetable canning in the Netherlands. The VIGEF (Dutch Fruit and Vegetable Processors Association) is concerned that the country's fruit and vegetable processing industry will face fierce competition from neighboring countries. The VIGEF is thus sounding the alarm.
It calls on the government to set a price ceiling or compensate fruit and vegetable processing companies of all sizes' energy costs. That must be done in line with countries surrounding the Netherlands to secure the industry and the related chain's survival and to keep healthy, locally-grown food affordable and available.
"A year ago, energy costs for own use comprised about five percent of the total costs of canned or jarred vegetables. Now, that's 25-35%. That means some canneries' power bills are ten times as high. Gas is used to prepare, mainly Dutch, fresh vegetables, for processing," says a VIGEF representative.
"During harvesting season, the vegetables and fruits come off the land, and just by heating them, their shelf life is extended without adding preservatives. That contributes to reducing food waste. Plus, everyone can eat healthy, local, seasonal vegetables all year round, and products don't have to be flown in from far away."
The increased energy costs affect glass and can prices too. These are essential packaging materials for canned foods. These prices have shot up by more than 35% on average. Also, vegetables themselves have become pricier due to, for example, having to compete with crops like grain - large quantities of which were grown in Ukraine - and higher fertilizer prices.
Hard to pass on
Canning companies can no longer absorb these costs. The sector has no choice but to pass this huge cost increase down the chain. That is undesirable because it makes it more expensive for people to continue eating healthily. "Countries around the Netherlands are making plans," explains the VIGEF spokesperson.
"They're compensating products and cushion the increased energy costs. That creates an uneven playing field and jeopardizes the fruit and vegetable processing industry and its supplying companies, including growers' future viability."
Sustainability goals still in place
Under a Multi-Year Agreement (MYA), the sector has already saved 23,7% of power from 2005 until 2020 via process improvements. That does not include the energy savings of the previous MYA in the early 1990s. "There are goals to become more sustainable. But to accelerate sustainability, companies, like consumers, must have purchasing power and perspective," the VIGEF spokesperson concludes.