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    Food producers complain of taxes crippling growth

    © vilt.be

    Food producers from both parts of the country have joined in condemning the level of taxes and excise duties they are subjected to, which they blame for a slowing down of the sector’s economic performance.

    Earlier in the month the national figures were presented by sector federation Fevia, which showed drops in sales, in investment and in imports, and only disappointingly small increases in exports and employment.

    The food production industry in Belgium is clearly split between Flanders and Wallonia, to the tune of 8.5 billion euros in 2018 for Wallonia, with more than 43 billion for Flanders. Nevertheless, the problems being faced by the sector are the same on both sides of the regional border, according to statements made at the opening of the recent agricultural fair at Libramont in Luxembourg province – an annual event bringing together farmers from across the country.

    A lasagne of excise duties, taxes and charges that make our products too expensive in Belgium, and stimulate cross-border shopping,” explained Guy Paternoster, president of Fevia Wallonia. The last point had been raised too by Bart Buysse, national president, when presenting global figures earlier this month. But more importantly, the rising cost of Belgian products is having a depressing effect on exports.

    Our engine of growth, which is exports, in beginning to splutter,” he said. Exports last year grew by 3.5% last year, much less than in previous years (7.5% growth in 2017, and around 5% annual growth over the last decade. “More importantly exports are no longer able to compensate for the continuing decline of sales on the domestic market,” Buysse said. As a result, total sales were down for the first time in years in 2018, by 0.8% to 51.8 million euros.

    The decline in sales in Wallonia, Paternoster said, was even more alarming, at -1.7%. And he called on the future Walloon government to adopt a policy of value creation rather than taxation. In Wallonia, the food production sector is the largest private-sector employer, as it is in Flanders. Anything that negatively affects the sector will affect jobs nationwide, and the economy as a whole, Fevia argues.

    Some key economic figures from Fevia’s annual report on 2018:
    Exports: 27.6 billion (+3.5%)
    Imports: 22.2 billion (-0.7%)
    Trade balance: 5.5 billion (+24.8%)
    Direct employment: 92,743 (+2.2%)
    Indirect employment: 173,104 (+2%)
    Sales: 51.8 billion (-0.8%)
    Investments: 1.6 billion (-6.7%)

    Source: Fevia

    Alan Hope
    The Brussels Times