Food industry of France, opposite to most of the industries worldwide, is performing quite appreciably, with organic food consumers not showing any signs of cutting down their consumption.
President of ANIA (Association Nationale des Industries Alimentaires), Jean-Rene Buisson, expressed that the food industry of France has been performing comparatively well amid recession, in spite of the price-cuts that it accepted while negotiating with the supermarkets in 2009, as reported by REUTERS.
Food manufacturers witnessed an overall increase of 5.5% in sales, which reached 162.9 Billion Euros in 2008. The figures included an export surplus of 6.6 Billion Euros, i.e. a decline of 17%, according to ANIA. Although French food makers recorded tight margins, they consented to introduce 1-2% reduction on an average in their prices this year, after negotiating with retailers.
According to Buisson, these price-cuts follow the last year’s price-hike which covered the commodity inflation only upto some extent. On an average, food makers’ margins remained in between 1.5% and 2%, representing a 0.5-1.5% decline for most of the smaller firms.
Addressing a news conference, ANIA President stated that the country’s food sector is currently not confronting big difficulties; however, the situation will become clear only after the summers whether or not the industry has overcome the recession. While talking of increase in the consumer expenditure in Q1 2009, he added, “There's no objective reason to be pessimistic. Overall, there's no reason why consumption shouldn't hold up.”
Besides, in terms of turnover, French food industry is the biggest industry in France, far ahead of other industries, and a chief contributor to the positive trade balance of France. This is largely accredited to the heavy investments made by food and beverages companies in research and development (R&D) activities. Moreover, the country is one of the worldwide leaders in functional food sector. It’s noteworthy that this sector has been speculated to be severely affected by the financial slowdown.
Moreover, organic food products are appearing recession-proof, with majority of French consumers continuing the purchase of these products in the near future, notwithstanding the rising concerns about the decline in purchasing power in the current economic scenario.
According to a Research Analyst at RNCOS, “France’s functional food industry is poised to outshine the overall food and beverages industry in the coming times. Food and beverages that serve a particular medical purpose, generally sold through chemists instead of grocery retailers, are likely to see the most resilient growth in sales amid recession”.
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