The Finnish Commerce Federation and the Finnish Grocery Trade Association have compiled a material package that opens up the importance of the food sector to the national economy, presents the entire food supply chain from input suppliers to consumers, via primary production, food industry, and commerce, and explains the reasons for unusually high cost increases.
“Securing the operational preconditions for primary production is important for all operators in the food supply chain and essential for the security of supply in our country. With the material we have prepared, we want to refute the wrong statements presented in public conversation and to present solutions for this difficult situation,” says Mari Kiviniemi, Managing Director of the Finnish Commerce Federation.
The increase in the cost of fertilisers, packaging materials, liquid fuels and energy, among other things, is largely due to market disturbances caused by the pandemic and the war in Ukraine. All operators in the food supply chain are affected by the increase in costs, but primary production has been hit the hardest.
“Due to the rapidly increased costs, companies in the commerce sector opened up previous contracts with their own partners. According to the companies operating in the commerce sector, negotiations have led to the payment of hundreds of millions of euros in additional prices to the companies of the food industry,” says Kari Luoto, Managing Director of the Finnish Grocery Trade Association.
The Finnish Commerce Federation and the Finnish Grocery Trade Association hope that the debate on the food supply chain is grounded in facts, and that the debate would move towards constructive cooperation and finding solutions. For example, the 2020 product group report of retail trade that is available to all parties free of charge should be utilised better in the food supply chain. In addition, the exchange of market information between businesses in the retail sector and businesses in the food manufacturing industry must be better communicated to primary production. The overall picture of the food market must also be improved, and, in relation to this, a separate project for food services is being prepared by food service wholesalers and food industry companies.
“Food is a necessity, the price of which is the driving force for the purchasing decisions of many people, and the international competitive strength of domestic food is in the interest of all operators in the food supply chain. We now need sustained effort for a dynamic food supply chain,” the association states.
Solutions proposed by the commerce sector:
- Developing a culture of dialogue: open, constructive and high-quality dialogue to maintain the attractiveness of the sector.
- Sticking to the facts: avoid incitement and provocation, keep party politics separate.
- Utilisation of facts: create a way of regularly compiling a joint snapshot of statistics and research.
- Communicate about positive things and replicate them. Assessing the food sector through its successful parts must also be possible.
- Create an instrument for reviewing developments in the overall market, including food services, and improve knowledge-based management through already available sources of information.
- Create means of managing exceptionally high fluctuations in input prices.
- Make better use of producer organisations to support the improvement of production efficiency and the compilation of procurement and sales volumes.
- Restructure agricultural subsidies to better serve the efficiency and orientation of active production and the associated structural development.
- Make food exports a strategic priority for food industry companies. There must be sufficient investment in product development and internationalisation, and the international networks of companies in the commerce sector must also be utilised.
- Increasing the legislation concerning the food supply chain does not solve the problems of primary production. Regulation must support the development, growth and competitive strength of the industry. National regulation must be in line with the competitor countries.
Mari Kiviniemi, Managing Director, Finnish Commerce Federation, tel. +358 (0)50 511 3189, mari.kiviniemi(at)kauppa.fi
Kari Luoto, Managing Director, Finnish Grocery Trade Association PTY ry, tel. +358 (0)40 068 8708, kari.luoto(at)pty.fi
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