Belgian food companies see profit margins fall

Belgian food companies saw their profit fall from 3.7% of turnover to 2.8% last year, according to calculations by food federation Fevia. The reason lies mainly in more expensive raw materials.

Fevia looked at the annual accounts submitted by the companies to the National Bank of Belgium and concludes that there is a marked decrease in profit margins. This is mainly because raw materials have become a lot more expensive in the past two years, costs which could not always be passed on to supermarkets or the catering industry. Supermarkets in particular are proving difficult customers in this respect, as they face fierce competition and a growing supply and therefore have little room to manoeuvre themselves. “The negotiations with supermarkets this year are just as difficult as last year,” says Bart Buysse, CEO of Fevia in the newspaper De Tijd.

Given the decreasing inflation and serious price increases in the last 2 years, some supermarkets want to turn discussions on their head and request lower prices now. But the prices of many raw materials are still higher than before. Sugar and cocoa, among others, have become even more expensive.” The food sector does not think there will be a quick recovery, making reference to additional costs to achieve more sustainability, but also to the fact that people are buying less than before due to high inflation. Border purchases would also play a role in this. Some products are cheaper abroad, especially in France, where the government has capped the prices of some products.

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