Food industry giant shuts down production due to soaring prices
A major French food processing company has shut down 80 per cent of its total production capacity because of skyrocketing energy and ingredient prices. The group stated that its costs have increased tenfold in the course of one year.
Cofigeo, which owns several French food brands including William Saurin, Garbit and Raynal and Roquelaure, announced the shut down of four of its eight French factories, citing soaring energy costs. The decision affecting 800 of the company’s 1,200 workers went into effect on 2 January.
“This decision aims to cope with the spectacular increase in its energy costs (gas and electricity necessary for cooking and sterilising cooked dishes), which will be multiplied by 10 from the beginning of the year,” the group said in a statement this week. They warned that its energy costs were set to surge this year, with President Mathieu Thomazeau saying, “It will go overnight, from 4 million to 40 million euros.”
Cofigeo is the first major food producer to enact such radical measures to deal with the costs of energy but according to Le Figaro, other companies in the sector are also facing great difficulty in adjusting to the rising prices of energy. Last month, Perifem, a federation of French supermarket chains, warned that possible power cuts and outages in France threaten to cause widespread food spoilage, as many supermarkets do not have adequate time to prepare for outages.
„We have never experienced this situation… Stores are very poorly equipped today with generators. We will not throw away frozen products that have for the most part more thermal inertia. On the other hand, for fresh products that do not last two hours, there will indeed be a significant waste,
said Perifem general delegate Franck Charton.
Energy security and food safety emerges as an intersecting issue not only for storing fresh food, but also for cooking and preserving food for canning or ready-meals.
As recently reported by V4NA, the energy crisis is pushing a growing number of restaurants and bakeries across France into a hopeless situation. Some restaurants find it simply impossible to pay their monthly energy bills, which have increased more than tenfold, and fear that they will have to close, while others are forced to sack staff as they are unable to cover wages.
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