Covid-19, Estonia, EU – Baltic States, Foodstuff, Good for Business, Investments, Markets and Companies

International Internet Magazine. Baltic States news & analytics Thursday, 03.12.2020, 22:01

Investments by Estonian food sector didn't top despite crisis

BC, Tallinn, 29.10.2020.Print version
While investments in the Estonian food industry did not come to a halt in the first six months of this year, the crisis may have an impact on the decisions to be made in the future, the manager of the Estonian Food Industry Association, Sirje Potisepp, says, cites LETA/BNS.

"Although investments in tangible fixed assets were made, businesses are very cautious and vary of taking big risks, in accordance with the forecasts concerning the economy, which in its turn is leveraged by the reduction in margins in the first half of this year," Potisepp said at a press conference of the Estonian Food Industry Association on Wednesday.

According to the manager of the Estonian food industry body, the food industry must invest a lot next year as new requirements will start to apply to the industry in connection with the European Green Deal and the "From Farm to Fork" strategy. Also, means need to be found for making packaging more environment-friendly, while there is no alternative to plastic at present. 

The total profit of the Estonian food industry in the first six months of this year dropped 20 percent compared with the profit earned in the same period last year to 34 million euros. 

According to Statistics Estonia, the biggest reduction in profits occurred in the fish industry and the fruit and vegetable industry -- by 105% and 85%, respectively. Profit declined also in the ready-to-eat food sector. 

Production volumes increased by 3.1%, but sales revenue only by 0.5%, which indicates a reduction in sales prices and consumers giving preference to cheaper goods. 

During the peak of the COVID-19 crisis, in the second quarter of the year, sales revenue grew only in the oil and meat industry -- by respectively 53% and 2%. Revenue grew foremost as a result of panic buying, as residents stocked up on long-life food products and products that can be stored in a freezer.

Potisepp also pointed out that labor costs, fuel and energy costs for the Estonian food industry are higher than those for our main competitors, which affects the sector's competition and export potential.  

Export volumes of the food industry grew by 8% in the seven months, yet this indicator contains also a price increase component. 

According to the manager of the Estonian Food Industry Association, the food industry handled  the crisis well and the worst affected was the sector of hotels, restaurants and catering, or  HoReCa.

Search site