Market Monitor Food Belgium 2016

市场监测

  • 比利时
  • 食品

2016年12月02日

The demand situation is benign, but food businesses continue to suffer from margin pressure due to high labour and energy costs and stiff competition.

  • Margins under pressure due to high labour and energy costs
  • Payments take 60 days on average
  • Insolvency environment expected to remain stable

 

Overview Belgium food industry

 

In 2016 the general demand situation for the Belgian food sector remained benign, mainly due to increased exports. The industry is expected to expand again in 2017, with value added growth forecast to increase 1.8%.

Businesses located in the Flanders region account for more than 80% of Belgian food industry turnover and exports. Employment figures have remained stable over the past couple of years, with 82,000 people directly and 128,000 indirectly employed in 2015. After decreasing in 2013 and 2014, business investments rose again in 2015, to EUR 996 million.

The food sector continues to positively contribute to the Belgian trade balance. Increasing exports are key for further sector growth, with quality and safety standards as well as process and product innovation being key selling points overseas. Main destinations remain France, Germany, the Netherlands and the UK, while exports to the US, Japan and the BRIC countries are increasing (mainly alcoholic beverages and chocolate). Distant foreign markets provide the best growth opportunities (in 2015 food exports to those markets increased 19%).

However, competition remains fierce in the global food market, and the profit margins of many (mainly smaller) Belgian food businesses are negatively affected by high energy and labour costs. Labour costs are almost 20% higher than in France, Germany and the Netherlands, countries which host big competitors. Energy costs have increased substantially due to additional charges imposed by the government. Another issue is volatile commodity prices. Food producers are forced to pass on any price increases to their customers, otherwise their yields would come under even greater pressure. Additionally it remains to be seen how the recent Brexit decision will affect Belgian food exports to the UK in the mid- and long-term. In order to remain domestically and internationally competitive, further investments in innovations and technological specialisation are necessary.

Beverages is a profitable subsector, which benefits from increasing international demand. 2016 sporting events (the European football championship and the summer Olympics) have helped to drive demand. However, an additional tax on sugary beverages has negatively affected sales, leading to increased cross-border shopping of Belgian residents. Excise taxes on alcoholic beverages have also increased.

 

 

Sector performance Belgium food market monitor

 

The dairy segment suffered in 2015 as a result of the abolition of EU milk quotas, but the market is showing signs of stabilisation after a volatile period. Further consolidation in this subsector is expected.

The meat subsector suffers from margin pressure and high competition, while a consolidation process is on-going. Some meat exporters are negatively affected by the Russian food import ban, which has also increased pressure on the fruit and vegetables segment.

While dependence on bank finance and businesses gearing are generally high in the food industry, banks are generally willing to provide credit to the sector. On average, payments in the Belgian food sector take around 60 days. However, much longer payment periods are not unusual for very large food businesses with robust market leverage. Protracted payments are not unusual, especially when peak periods lead to liquidity issues for some food businesses. However, non-payment notifications are not expected to show major increases in the coming months. The level of food insolvencies is average compared to other Belgian industries, and a slight increase was noticed in H1 of 2016. That said, no major increases are expected in the coming months.

 

Strenghts and weaknesses belgium food market monitor

 

Our underwriting stance remains generally neutral to cautious, given the cost and margin pressure for many businesses in the industry (affecting mainly smaller companies active in the dairy and meat segments). We take into account the seasonal trends that affect most food subsectors and manage credit exposure through time-limited cover. Despite our generally cautious stance, we try to find ways to provide cover by obtaining additional information, for instance, good payment experience or a guarantee from a stronger parent company.

 

 

 

相关资料

免责声明

Each publication available on or from our websites, such as, but not limited to webpages, reports, articles, publications, tips and helpful content, trading briefs, infographics, videos (each a “Publication”) is provided for information purposes only and is not intended as a recommendation or advice as to particular transactions, investments or strategies in any way to any reader. Readers must make their own independent decisions, commercial or otherwise, regarding the information provided. While we have made every attempt to ensure that the information contained in any Publication has been obtained from reliable sources, Atradius is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in any Publication is provided ’as is’, with no guarantee of completeness, accuracy, timeliness or of the results obtained from its use, and without warranty of any kind, express or implied. In no event will Atradius, its related partnerships or corporations, or the partners, agents or employees thereof, be liable to you or anyone else for any decision made or action taken in reliance on the information in any Publication, or for any loss of opportunity, loss of profit, loss of production, loss of business or indirect losses, special or similar damages of any kind, even if advised of the possibility of such losses or damages.