CAOBISCO articulates today's challenges

Since the inception of CAOBISCO nearly 50 years ago, the European market has witnessed the post-war acceleration of productivity in the 50s and 60s, the food mountains of the 70s and 80s, and now the glaring view of a global food industry getting to grips with soaring prices for energy and raw materials.

For Fillippo Cerulli, the first priority as he embarks on his tenure as CAOBISCO president is to add value to the association, enabling it to evolve, adapt, and reflect new requests from members.

“If we analyse the last few years, we observe much change in our markets and structure,”​ he told ConfectioneryNews.com.

Regional markets are now national, and very often European, markets. In parallel, the problems, and their size, have changed, continues Cerulli.

In the past, each member state would work to create their own solution, but now there are increasingly European solutions, that must occur without losing a strong connection with the local market.

And against the background today of strong inflation on key raw materials, such as wheat, vegetable oils and sugar, a pivotal role for the association, that represents some 1800 firms and 245,000 employees, is to contribute to a structure that will offer support mechanisms during challenging times.

“We have to push the European agriculture sector to be more open, and more flexible to market changes,”​ said Cerulli.

He deems that existing regulations in the EU have created an inflexible supply, and that when a crisis emerges, the market is unable to react with sufficient rapidity.

Notably, with wheat: CAOBISCO is currently lobbying the Commission to ensure some buffer stocks exist for this essential cereal that provides a range of food ingredients, from starch to flour, used widely by its members.

While stocks are expensive to keep, Cerullli argues that actually not keeping them is a more expensive option, witnessed by the strong inflation on commodities and finished goods over the past 24 months.

And with global buffer wheat stocks currently at a 30 year low and current supplies vulnerable to untoward weather conditions, the European food industry is keen to ensure they have access to some security stocks.

In the past, the EU had very large intervention stocks, but the last of these were sold a couple of years ago.

According to Cerulli, the Commission is currently discussing the option of abolishing intervention stocks altogether.

And while the association is not arguing necessarily for a return to intervention stocks, they believe some security stocks are necessary. Access to such stocks could also dampen inflation to consumers, currently galloping in today's market place.

“If the European Union wants to solve inflation, or reduce it, they have to start managing it from the beginning - agriculture and raw materials,”​ asserts Cerulli.

A “beginning”​ that is tied intimately to the CAOBISCO members. Together, the association members buy some 30 per cent of the European sugar production, 35 per cent of skimmed milk powder at full EU price, as well as a large share of the glucose, butter, wheat, eggs and dried fruit produced in the European Union.