Food nationalism is a warning light for global supply chains

Perhaps it is a little dangerous to lay too much importance on French politicians talking about agriculture, however, the latest statement from the French government might be an early pointer to pressure on globalised supply chains after the COVID-19 panic has passed.

Bruno Le Maire, the French finance minister, declared last week that grocery retailers should “‘stock French products” and followed this up with a call “for economic patriotism”. This echoed a statement by the French President that “delegating our food supply to others is madness. We have to take back control”.

It appears that French supermarkets have taken notice of this policy and are beginning to focus on increasing their purchase of food in France. Carrefour, which is not only France’s largest retailer but also one of the world’s largest supermarket groups, has announced that it has already achieved its goal of sourcing 95% of its vegetables and fruits from French producers. The French newspaper Les Echos reports that all “strawberries and asparagus sold will be grown in France as the season begins”. Other supermarkets in France are pursuing similar policies.

The attractiveness of such ‘food nationalism’ has been heightened by the problems in the road freight sector, with trucks moving across Europe encountering delays of many hours due to new quarantine related paperwork at the borders.

In addition, the COVID-19 crisis has placed the French agricultural sector under pressure, with wild swings in demand for food, with basic food-stuffs seeing exceptional demand but specialities seeing a collapse in the market, the latter heavily influenced by the closure of restaurants. This has prompted large French retailers to stabilise their suppliers by focussing their purchasing at home.

How long France is able to sustain a policy which is a contradiction of the conception of the EU single market is unclear. However, even though France has always opposed the idea of free-trade, that they feel able to articulate such a policy now is a signal that the political climate around global trade is changing.

The issue of food sourcing may become prominent in the near future with significant implications for areas such as the sea freight reefer market, airfreight for fresh produce and the agri-products hubs of large freight forwarders. The issue may well spread to other industries such as pharmaceuticals and medical equipment, whilst the existing rhetoric around the automotive sector may solidify into long-term policies. All will have major impacts on most parts of the international logistics sector.

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Source: Transport Intelligence, April 02, 2020

Author: Thomas Cullen