The third Citrus Summit organized by the Citrus Gowers Association of South Africa (CGA) took place in Port Elizabeth on 12-14 March 2019 and was attended by 600 delegates. The conference covered different issues including the evolving political, economic and business perspective from a South African perspective, ethical compliance, biosecurity issues, logistics developments as well as market development for the EU, the USA and Russia. On the occasion of the summit, Freshfel General Delegate Philippe Binard presented a global analysis of the citrus market, looking at trends for production, trade and consumption for the citrus category as a whole as well as for oranges, soft citrus, lemons and grapefruit. The growth of production, in particular for lemons and soft citrus, will require international partnership and cooperation to stimulate consumption around the world.
Despite high uncertainty in the fruit and vegetable business environment, Freshfel Europe urges the sector to continue to stimulate consumption for the benefit of European consumers. The current multiplicity of uncertainties, including Brexit, the on-going Russian embargo, the growing impact of increasing climatic events and other market access challenges, should serve to further stimulate the sector to boost current low consumption levels across Europe.
The European fresh fruit and vegetable sector is facing a tumultuous period that is challenging fresh produce production, trade and consumption. On the one hand the last two years have been noted for severe weather events, which have impacted produce quality, destabilized supply and demand and resulted in market instability in many regions. On the other hand, market uncertainties continue to cloud any transparency in the business environment. As we approach the 29 March 2019 deadline the outcome of Brexit still remains unknown, while at the same time the trade embargo in Russia as well as the Mediterranean basin and other SPS market access challenges have led to complexity in market diversification. A new wave of unilateralism and protectionism around the world are further contributing to an unpredictable trading environment that is increasingly complex to navigate for businesses.
Waiting for conditions to return to normal however can lead to missed opportunities. Despite this complex trading environment the sector still needs to stimulate consumption on the European market. European daily intake levels remain below the minimum level recommended by the World Health Organisation of 400g of fresh fruit and vegetables per day. Accordingly in 2018 Freshfel led a European Commission Thematic Network, creating a Joint Statement with other stakeholders comprising of 43 policy recommendations for all actors in society on how to stimulate consumption across Europe. Additionally this year in cooperation with Aprifel, Freshfel has embarked on a three year European Commission funded agricultural promotion programme entitled ‘FV for a Healthy EU’ to boost fruit and vegetable consumption by 18-30 year old Europeans, the consumer segment with one of the lowest levels of consumption.
Freshfel’s members will be discussing strategies for navigating this unpredictable business environment and promotion tools at Freshfel’s 2019 Annual General Meeting, which will take place on the 5-6 June 2019 in London, UK.
Excellent results for the workshop organized by Freshfel Europe and the China Entry & Exit Inspection and Quarantine Association (CIQA) in Beijing, aiming to create a shared knowledge base for future trade relations, to understand respective production systems, and above all to and explore the four basic pillars for trade between the two countries—market access, phytosanitary policies and requirements, food safety policies and requirements, and specific procedures for various products.
The format of the workshop, particularly effective and highly appreciated, focused on all the major themes regarding trade between Europe and China, with bilateral presentations followed by discussions, and with contributions from Woo Huao, director of the AQSIQ Biosecurity Division, Jerome Lepeintre, head of the Agricultural Section of the EU Delegation to China, and Ms Li Li, director of the Economic Crop Division of the Chinese Agricultural Ministry.
Italy presented an overview of the current situation for kiwifruit, apples, pears and citrus fruits as part of the Business Case session, dedicated to businesses and problems in trade relations.
“We had the opportunity,” declared Simona Rubbi, CSO ITALY’s officer for the opening of new markets, “to present a clear and analytical outline of the situation for exports of Italian produce to China, with the excellent performance of kiwifruit in general and the growth in particular of yellow kiwifruit, and the great potential for the development of the market for pears, apples and citrus fruits.”
“With regard to citrus fruits,” said Salvo Laudani, Oranfrizer’s Marketing Manager and president of Fruitimprese Sicilia, “we clearly described the current situation, asking for the agreement between China and Italy signed in January 2016 to be applied to the campaign now in progress, and for the agreement to be extended to include the possibility in future of transporting citrus fruits not only by sea but also by air or rail. This opening is vital to guarantee the arrival of products of excellent quality, and I’m convinced that the Beijing workshop offered us a great opportunity in this area.”
In the sector of apples and pears, it was highlighted that in March 2015, the Italian ministry sent an official communication to the Chinese authorities requesting the official opening of export negotiations, but that no reply has yet been received.
“We took the occasion of the workshop,” said Giulia Montanaro of Assomela, “to stress the desirability of starting joint negotiations for both apples and pears with the greatest urgency.”
The Italian delegation highly appreciated the presence and concrete support offered by First Secretary Enrico Berti and Raffaella Danielato of the Economic and Trade Department of the Italian Embassy in Beijing, and also of the Italian Ministry of Agricultural Policies.
In addition, the representatives of the six countries participating in the mission clearly reiterated the need for EU-led negotiations, despite China maintaining once again that discussions must be pursued independently by each EU member state.
In overall terms, the Freshfel Europe workshop achieved its aims, highlighting the opportunities offered by an immense market, but above all the need to adopt an approach of constant discussion and exchange with the Chinese authorities to ensure an even fuller understanding of the production methods, plant defence techniques and transport and logistics systems of the Italian fruit and vegetable sector.
Ceasing to enjoy the benefits of the 36 free trade agreements signed by the EU with non-EU countries is among the consequences the UK – heavily reliant on external imports of fresh produce – could face it is exits the EU. This is one of the issues raised by Freshfel Europe, the European Fresh Produce Association, is the wake of the UK referendum result in favour of leaving.
In a press release on the potential impact of Brexit, the organisation said it is “severely concerned” by the economic consequence the outcome of the referendum may have on the fresh produce sector.
Short term consequences might be disruption of trading relations and insecurities based on a drop in the pound, while in the longer term, the UK’s departure would lead to an elimination of existing framework trade agreements, it said.
Higher fruit and veg prices
Elaborating on the potential short term impact for the fruit and vegetable sector, the group said the drop of the British pound is already causing insecurity among fresh produce business operators. Depending on the currency stated in contracts, the current drop is causing severe losses on one or the other side of business operations.
This price volatility will in the long run be passed on to consumers and could see higher fruit and vegetable prices in the UK as well as limiting supply given the loss of competitiveness of the British market. This will not only affect sourcing from the EU- 27, but from all non-EU countries.
Longer term impact: trade upheaval
On the longer term fallout, the group stressed that the UK, a significant importer of fresh produce from non-EU countries, currently enjoys the benefits of trade liberalisation conditions set by the existing 36 FTA’s that the EU signed on behalf of the 28 member states.
“Fresh produce trade was in this respect liberalised with many countries in the Mediterranean basins, with Southern Hemisphere countries, ACP countries and more and more countries in Southeast Asia.
“With the possible exit of the UK, the FTA’s negotiated by the EU will cease to apply for import into the U.K. The country will have to recreate its trade relationships with third countries, governed by the necessity, to renegotiate bilateral trade deals individually with each country. By experience, these negotiation processes are usually time consuming, lengthy and need to comply with complex legal requirements,” Freshfel Europe said.
Moreover, the departure could also trigger renegotiations of EU-FTA’s, initiated by non-EU partner countries claiming changes by the contracting parties.
There may also be an impact on the British labour market with regard to the residency rights of foreign workers.
Call for rapid clarification of political situation
Freshfel Europe called for prompt clarification of the political situation, to give business operators the opportunity to adapt to new market conditions.
It said it will closely follow coming political and economic developments, voicing the requirements of the fresh produce business.
In summary, the group said it will “continue to work closely with its members to monitor the specific aspects relating to fruit and vegetables, to minimise the impact for the fresh produce sector of this development.”
Snapshot of trade between the UK and the EU 27
The UK market is currently supplied with fresh produce originating from close to 120 countries.
In 2015, the UK received more than 5.6 million tons of fresh fruit and vegetables (worth €6.8 billion) from either the EU or other origins from around the world, of which 52% (2.9 million tons) originated in the EU.
The main fresh produce suppliers are:
- Spain (1.4 million tons),
- The Netherlands (700,000 tons – including some trans-shipments),
- South Africa (350,000 tons),
- Costa Rica and Colombia (300,000 tons each),
- also the Dominican Republic, France, Germany, Ireland (ca 200,000 tons each).
- bananas (1.1 million tons),
- apples (450,000 tons),
- soft citrus (300,000 tons),
- oranges (280,000 tons),
- table grapes (280,000 tons)
The UK also exports/re-exports up to 240,000 tons to EU-27 and non-EU countries, trade worth €240 million.
Ireland is the main destination, taking up close to 50% of this business.
Freshfel Europe represents the interests of the fresh fruit and vegetables supply chain in Europe and beyond. It has over 200 members, including companies and associations.
Read its full statement here: www.freshfel.org/docs/2016/Press_releases/20162806_Press_Release_U.K._referendum_and_its_consequences_on_the_fresh_produce_sector.pdf
Freshfel Europe and Europatat celebrated their first-ever combined annual event on June 2 in Brussels.
Under the theme “Not business as usual”, following the European Commission’s work plan 2016, the conference hosted speakers from the European policy sphere as well as innovative business pioneers. With over 170 participants from both sectors, the event looked into the upcoming political and business-driven challenges for both industries.
“To reach today’s and tomorrow’s consumer, both sectors will have to rethink the way its products have been produced, packed and presented,” both associations concluded in a joint statement.
Accessibility of information, growing individualism, connectivity and the resulting societal changes have led to a ground-breaking fragmentation of today’s consumer. While price is less and less the driving element, consumers more and more connect their purchase decision to the accompanying immaterial values of the product. Aspects such as health, mental wellbeing, a sustainable and local production are driving aspects through all ages and consumer groups., the associations said in a media release.
Combining the idea of doing something ‘good’ for yourself and for others will be one of the crucial aspects of promoting products in the future, they said. How this can be applied in the potato and the fruit and vegetable industry was the dominant theme of the joint conference.
Both associations also used the event to held elections for their respective boards. Freshfel Europe re-confirmed Luc Clerx (Prominent) for another two-year period as president of Freshfel Europe as well as Stephan Weist (Rewe Group) as vice-president and Marc DeNaeyer (Trofi) as treasurer. Europatat welcomed former board member Jos Muyshondt (Pomuni) as new incoming president for the next term, while Domenico Citterio (Domenico Citterio & c.s.r.l.) and Gilles Fontaine (Desmazières) complete the board as vice-president and treasurer respectively.
Europatat and Freshfel Europe will jointly celebrate their first combined annual meeting on June 2 in Brussels.
Adhering to the European Commission work programme for 2016, the common conference will be held under the theme “Not business as usual”.
The conference will review the upcoming challenges and opportunities for both sectors in light of a complex political and business environment. With a broad international line up covering policy and business perspectives, the associations will contribute to prepare both sectors for the future in an ever-disruptive environment, they said in a joint press release.
“The potato and the fruit and vegetable sector are looking back on a decade full of changes. Changes, which were at times unexpected and which penetrated all dimensions of the business. The digital revolution has shaken the business on all layers: in the production, in the supply-chain and in the interaction with clients.
“But also topics such as increased security threats, the introduction of the Russian embargo, the search for market diversification, climate change, changing consumer behaviour, the ongoing debates about an end of Schengen and trade negotiations with uncertain results are keywords, which have become constant companions of the daily business decisions.
“Successful business must learn how to manage these uncertainties and address these multifaceted challenges. Europatat and Freshfel Europe are therefore joining forces to explore strategies beyond the conventional paths – to use the sectoral synergies and to refocus both sectors sight on what is essential: good, healthy, nutritious products with a big potential,” the release said.
It went on to say that members of both associations will gain an exclusive outlook on the upcoming policy priorities given by high-level officials of the European Commission, who will highlight the Commission priorities in the field of trade, agricultural and promotion policy as well as quality and food safety.
Also to be discussed is disruption in both sectors from new competitors, “young, dynamic technology driven start-ups, who claim to have found the key to future business success.” Franziska Krauskopf, innovation advisor at TrendOne, and Hello Fresh CEO Thomas Griesel will look at the inherent potential and pitfalls of this technology-driven evolution, while Euromonitor global consumer expert Daphne Kasriel Alexander provides a look at the top ten consumer trends and their impact on the fresh produce and potato sectors.
Europatat is the European Potato Trade Association, representing the interests of the seed and ware potato traders in Europe. It has over 40 members, including both companies and associations.
Freshfel Europe is the European Fresh Produce Association. It represents the interests of the fresh fruit and vegetable supply chain in Europe and beyond and has over 200 members, including both companies and associations.
Interview with Freshfel Europe chairman Luc Clerx
What is your assessment of European trade over the past 3 years?
Last year, the European fruit and vegetable trade was confronted with the far reaching implications of the Russian embargo. While Russia, overall, only represented 2% of the total European fresh fruit and vegetable business, its impact was significant because exports to Russia also accounted for around 40% of EU exports to non-EU countries. The sector responded promptly, repositioning itself in other non-EU country markets (Asia, Latin America, North Africa), but also took innovative measures to stimulate consumption in the domestic market. Freshfel and its members were also active in addressing market access hurdles to further open new markets. Overall, while the flow of produce remained stable, the main challenge for many commodities was on prices, which recorded a decline from which they have not yet recovered.
What are the latest possibilities for progress over access, particularly to the US and Asian markets?
Within Freshfel, we are adamant about setting up a new European strategy to facilitate exports. We are convinced that greater coordination under the leadership of the Commission would help to facilitate the opening of a number of markets which currently remain closed or which impose restrictive and excessive barriers, mainly in the SPS (sanitary & phytosanitary) area. A pilot project is currently in place to introduce a system approach for 8 EU member states to export apples and pears to the US. The discussion is hopefully now in its final stage and could govern the framework for exports as of next season. The main objective is to avoid the costly pre-clearance system and have the EU recognized as a single entity. This would avoid having to negotiate market access product by product and member state by member state. The model used for the US could serve as a basis for other destinations, Mexico and Chile being the next two where such a scheme could be tested.
School schemes and promotions: the actions implemented use far less than the available EU funding. How can the sector be mobilised into making full use of it?
The school fruit and vegetable scheme is an important tool that can help to educate young consumers on the taste, texture and diversity of fruit and vegetables. Freshfel has been working actively to keep the system, which at one stage was challenged by the Juncker Commission. Freshfel was successful not only in securing the ongoing availability of the scheme but also in managing to convince the EU to further increase the budget available for the scheme, from €90 million to €150 million, with a view to covering the accompanying measures as well. Usage of the budget was quite high with the €90 million budget, as almost 80% of the available funds were effectively used. Today the level of usage has indeed fallen to 65%, but it is 65% of the increased budget. Consequently more money is effectively being used, as the funds spent on the scheme are now approaching €100 million. As the rules for the accompanying measures become clearer, it is expected that the budget used will continue to increase and will get closer the €150 million available.
With regard to promotion, the fruit and vegetable sector is the main user of the funds available for EU agricultural products. Around a total of €25 million is usually granted for sector projects to support sales in both the domestic and non-EU markets. The EU has now embarked in a reform of its promotion policy, which will progressively come into force next year. The EU wants to focus more on non-EU markets but will also provide a bigger budget. Over time the budget will move from the current €80 million towards a €200 million package for all agricultural products. The new rules are challenging, but this will still represent an excellent opportunity for the sector to get access to budgets to boost the promotion, marketing and image of fresh fruit and vegetables and provide information on them.
Are greater restrictions on access to the EU market envisaged by the Commission or desired by European producers?
The EU has always been an open market and, as a matter of fact, it remains the leading world importer of fruit and vegetables. The EU imports around 12 million tons of fruit and vegetables on a yearly basis. However, the world is rapidly changing and demand in many other regions is growing, particularly in Asia, Africa and Latin America. There is therefore more competition on the world market. As regards access to the EU, a number of factors influence nonEU country exporters’ decisions to export or not export to the EU. The exchange rate is an important factor, so are market demand and prices, and also some market access conditions. EU food safety legislation and European customers’ requirements remain demanding, making the EU market the safest for its consumers. Besides, following multiple instances of non-compliance with the EU plant health legislation (more than 7,000 per year – including close to 2,500 in the fruit and veg sector), the EU is taking action to secure compliance with it. The EU is also reshaping its plant health policy and new rules might apply as of 2018. It is therefore important for suppliers to the EU to take the plant health legislation seriously and implement the necessary corrective measures to remedy possible non-compliance in order to guarantee supply stability.
Any other hot topics?
Stimulating consumption should remain the main priority for the sector. Too many member states consume less than the minimum WHO recommendations and the long term trends are indicating a decline in consumption. Some encouraging signals were noted in the aftermath of the Russian embargo, but need to be confirmed and consolidated. The sector and its produce have numerous advantages for nutrition, the environment and the economy which need to be appreciated better. The sector needs to understand and know its consumers better and needs to build on the pillars of a healthy diet to stimulate consumption. Just increasing consumption by a few grams per capita per day will assist in balancing the market situation better and moving the sector forward with a bright outlook for the coming years.
‘Think outside the box’ and seek creative ways to stimulate consumers to eat more fresh fruit and vegetables – that’s one of the messages from Freshfel Europe’s annual policy event held yesterday in Brussels.
The call comes amid figures from the association which show some consumption of some types of fresh fruit and vegetables has slid considerably.
In a press release, Freshfel said the fresh produce sector should continue to move ahead to stimulate consumption and enhance the positive image of fresh produce, two things that are among its priorities for the year ahead.
Freshfel said that at its annual policy event, several speakers presented creative ways to promote fresh produce. Samuel Levie, from Food Cabinet in the Netherlands, started the day with a presentation on a successful low-budget campaign called ‘Big Bang Broccoli’ as well as a campaign called ‘Power to the Pieper’ to promote the humble potato as a contemporary superfood.
Images from Power to the Pieper video
Daniel Fritz, a social media expert working among others for the European Commission, raised awareness about how the fresh produce sector can profit more by using social media to spread positive messages on its produce. He showed some surprising keywords and recommendations the fresh produce sector can use.
“Consumers are aware of the healthy aspects of fruit and vegetables, but more can be done to promote the fun and positive effects of fruit and vegetables,” said Freshfel Europe president Luc Clerx. In the foreword to the association’s 2015 activity report,
Luc Clerx President of Freshfel Europe
Clerx had strong words for the European Commission, which he said was now “eager to remove the successful school fruit and vegetables scheme.” He defended the scheme as an essential tool for changing the diet of European consumers in the long run.
Other priorities for Freshfel in the coming year are to encourage the competitiveness of European fruit and vegetables production, to move ahead on food and plant safety and research and innovation, and to enhance trade while also securing efficient health and nutrition policies.
Freshfel Europe is the European Fresh Produce Association and represents the interests of the fresh fruit and vegetables supply chain in Europe and beyond.