Top Editors ... The competitive challenge

Title: The competitive challenge
Date: 17/08/2006
Autor: By Maureen Byme

The Confederation of the Food and Drink Industries of the EU (CIAA) has just published its Benchmarking Report 2006. It stresses the need for EU food manufacturers to be 'more competitive', and highlights the áreas that need special attention, namely R&D; the high level of administrative burden; the cost of agricultural raw materials; and access to non-EU countries for exports.
At first glance, the Report is just another document that points out where things are going wrong, but doesn't suggest any real solutions. However, the three objectives of the Benchmarking Report were: to review the EU food and drink industry key indicators; identify weaknesses and challenges to growth potential of the sector; and finally (and most importantly) it sets out a number of recommendations to address specific problem áreas through cleariy defined actions. 'Action' is the word that really leaps out.
There is an urgent need for an increase in R & D investments in order to support innovation and promote a shift to higher valué added food production', says the Report. The shocking truth is that R&D spend in the EU (excluding the newer Member States) is only 0.32% of industry output; whereas Norway and Japan are just short of the 0.8% mark. Actions suggested are: a higher share of EU R & D funds (11 % instead of 5.5%); more European Technology Platforms (such as the ETP Food for Life); business-friendly administrative procedures; and action from individual Member States to support prívate R&D investments.

Some of this is tangible: for example the increase in EU R & D funds. The question is, will it happen? The ETP model is also a tangible and useful tool in stimulating research and innovation. But then we get into the wishy-washy área of 'business friendly admin'. Someone has to make it happen, but who?

The administrative burden is a particularly thomy subject, as more and more regulations are introduced, even though they are supposedly becoming 'simplified'. The Novel Foods regulations, for example, are onerous to an industry striving to innóvate, while interpretation of regulations still poses a problem from country to country. 'Strong Commission action is necessary to ensure enforcement of EU law as effectively as possible', says the Report. Fine words, but again, the question is how?

Access to competitively-priced raw materials ¡s an on-going problem, which is partly being addressed wrth EU agricultural reforms, but still remains uncertain; while the question of improving access to third country markets for EU products is cnjcial, as exports have been shrinking over the past 10 years, much to the benefrt of Australia, New Zealand, China and Brazil.
In all, the Benchmarking Report is a timely and excellent cali to action for the EU food and drink industry, for which there are many challenges. Let's hope that some of the recommendations transíate into real action, and it's not just more hot air.