The impact of COVID-19 on the food supply chain

EESC info: Restaurants and bars have been closed during the pandemic. How does this situation affect food producers, suppliers, restaurant owners, the culture of food and food consumption? What is the best way to get people back to work?

Peter Schmidt, President NAT section: Food producers, the food processing industry and food retailers are under pressure even in normal times. Everyone expects an adequate food supply of the highest quality around the clock.

The good news amid all the bad that the pandemic has brought is that Europe's food supply works well even in times of crisis! The food supply chain is arguably the one that has functioned best throughout the current crisis. There has not been one single moment when the food shelves in Europe's markets were empty.

However, the pandemic has pinpointed some weaknesses which had been overlooked before. I want to briefly highlight three of them.

One problem which soon became apparent concerned the employment of harvest workers in farming, and another was the structure of the meat industry.

In both cases, production relied on cheap labour, predominantly from eastern European countries and migrants (or third country nationals), with abuse of the free movement of workers in Europe and enormous price pressure on agricultural and food products.

The travel restrictions and lockdowns disrupted these supply chains. At the same time, the dire conditions in which these people lived and worked were exposed. Those conditions also led to chains of infection and outbreaks of the disease. In the case of the meat industry, this prompted the German government to adopt regulations to protect workers.

The third area of the food supply chain that is in massive trouble is the hotel and restaurant sector, and the entire tourism industry globally.

In most countries, hospitality businesses are closed due to bans, curfews, travel restrictions and shutdowns across the sector. Thousands of companies are struggling to survive or facing extinction.

Millions of workers are on furlough or retention programmes or have lost their jobs. Many hotel companies have started restructuring and laying off workers. The future of the sector is uncertain and the recovery likely to be long and difficult.

The following must be done as soon as possible:

  • ensure swift adoption and implementation of the EU Recovery Plan: businesses and workers cannot wait any longer;
  • place hospitality and tourism at the heart of national recovery and resilience plans (NRRPs), involving the social partners in an effort to save as many jobs as possible, support the sector economically and strive for a swift, but safe and coordinated, recovery and ease of travel;
  • extend all emergency measures such as short-time work schemes at least until September 2021, ensuring fair allowances for all workers, including seasonal and temporary workers;
  • increase short-time allowance payments to 100 %;
  • proper implementation and enforcement of applicable EU legislation as regards the rights of cross-border and seasonal workers, particularly the right to equal pay for equal work in the same place, including through national and cross-border concerted and joint labour inspections;
  • pursue a new sustainable tourism model through the European Green Deal and the Farm-to-Fork strategy.

Any financial support such as state aid, loans or tax exemptions should only be granted to businesses which:

  • safeguard employment/create decent jobs and uphold workers' rights and collective agreements;
  • are not registered in tax havens and have always paid their fair share of taxes and social contributions;
  • agree to suspend dividend payments, share buybacks and stock options during the crisis.