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News

Freight Price Hike to Hit Meat Trade

December 19, 2012

Pending increases in freight prices threaten to hit EU food exporters’ profits by up to €10m per year and could lead to many companies withdrawing from selling to non-EU countries.

All of the major deep sea shipping companies are set to apply a $1,500 (€1,845) per container price increase for refrigerated goods at the start of January — upping the average container price for exporters of agri-food and fish from $3,000 to $4,500.

The move is being led by Danish shipping line, Maersk, which handles 40% of Irish food and fish exports to destinations outside the EU; but is being followed by all of its competitors.

The price increase, a pan- European policy, is aimed at alleviating losses on refrigerated container transport outside of Europe.

But the Irish Exporters Association (IEA) has said if the prices need correcting, they should be phased in over a period of time, rather than brought in at once.

The association also said that the increase will hit Irish firms hard — with many seeing their bottom line being hit by between €5m and €10m per annum, forcing many to stop exporting to non-EU nations.

“This will impact heavily on all Irish agri-food and fish exporters, who use these shipping lines for exports outside the EU; and will add an estimated 10% to their export costs.

“This is not an increase that can be passed on and will, inevitably, lead to lost export sales,” said IEA chief executive John Whelan.

The IEA estimates about €200m worth of annual meat exports from Ireland to non-EU countries will be affected by the price hike, with that figure coming to €330m and €86m, for dairy and fish exports, respectively.

Last year, China was the most important market for pork exporters; with the Chinese consuming half of the world’s pork products.

The IEA has met with the major shipping lines and has written to Agriculture Minister Simon Coveney, and Transport Minister Leo Varadkar, urging them to raise the matter at EU level.

“There are strong indicators of cartel action and restrictive business practices involved with a similar price increase across the majority of deep sea shipping lines. This anti- competitive practice, which is in violation of EU laws, must be stamped out,” Mr Whelan said.

via Freight price hike to hit exporters | Irish Examiner.

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