Spain

Spanish meat industry looks at significant losses

Increased costs may generate a decline of 500 million in companies revenue.

Posted on Nov 25 ,09:28

Spanish meat industry looks at significant losses

The Spanish meat industry may suffer significant losses in the months to come if production costs continue to climb. The continuous increases in the electricity bill, elevated prices of raw and auxiliary materials (packaging materials, logistics, additives, cleaning products), labor costs, the rise in freight costs and the shortage of containers are just some of the details that worry any player in the industry.
According to the Spanish interprofessional association ANICE, companies in the meat sector could face losses of more than 500 million euros if prices continue to climb at the same level and if they do not experience a drop in the next few months. Electricity is one of the major factors that threaten the competitiveness of Spanish companies. "If we take as a reference the last 3 months (July-October 2021), the average price of electricity has been 153.99 euros / MWh, which represents an increase of 353.48%, compared to the average price of light during the same period of 2020," points out ANICE.
Currently, inflation in Spain is 5.4%, the highest level reported in 29 years and that leads to an increase in labor costs. "All these costs are negatively affecting companies, at a critical time when they are beginning to recover from the pandemic. To which are also added the problems derived from the increase in freight costs and the shortage of containers. The mismatch between the sharp increase in demand after the pandemic and the reduction in supply has led to higher rates on practically all trade routes, which is of particular concern to the industry on the eve of the Christmas season," added ANICE.

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