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Low levels of R&D, high input costs and uneven relations with retailers are amongst the reasons emerging economies are outpacing growth of the EU food and drink sector, according to CIAA report carried by AP-FoodTechnology.com.

The Confederation of Food and Drink Industries of the EU (CIAA) last week published its annual Competitiveness Report (http://www.ciaa.eu/documents/brochures/ciaa-comprep-web.pdf) which assesses the the industry’s performance against political and economic developments.

The report the EU sector has a “stable but low growth” state of growth and has continued to operate well throughout the economic crisis without state support. It is the world’s biggest exporter of food and beverage products. The industry had a turnover of some €965 billion (NZD$1.78 trillion) in 2008, and 4.4 million employees.

However a number of factors are stymieing its potential, and causing its growth to be outpaced by emerging economies – in particular China and Brazil.

These include low investment in R&D, and competitive issues with retailers that squeeze food manufacturers. In addition, the business environment is highly regulated, labour productivity is lower than in some other parts of the world, and input prices, although currently stable, are high.

CIAA president Jesús Serafín Pérez was quoted saying the EU food and drink industry wants enhanced political support for the implementation of all actions aimed at increasing the industry’s competitiveness as identified by CIAA.

After eight years of decreasing trade balance, the EU food and drink sector in 2009 registered an upswing due to a sharp decrease in imports during the economic crisis.

The value of food and drink imports shrunk by over 11% in 2009 compared to 2008, and even more in volume terms. The value of exports dropped by 7.4% while volumes remained the same, as a result of lower prices. – Source: AP-FoodTechonology.com

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