BRUSSELS (Pakistan Point News / Sputnik - 24th March, 2020) The coronavirus pandemic has already had a severe impact on key sectors in Europe such as the economy, finance and society, but food supply chains, in particular, have faced extreme pressure as people rush to the stores to stock up on non-perishable foods before the inevitable quarantine.
Despite national governments claiming there was no reason to take drastic measures, borders were eventually shut, public gatherings were banned and the movement of citizens was limited. The panic followed soon after. Given the current state of the epidemiological situation, the president of the European Commission, Ursula von der Leyen, admitted that Brussels had not recognized the severity of the crisis at first.
While some countries such as Singapore were well prepared for the COVID-19 "black swan" crisis, Europe quickly demonstrated that it was not ready to combat the disease and that even strategic stocks of face masks were missing. So-called black swan crises are considered to be highly disruptive, therefore companies should be able to manage well supply-chain risks, as just-in-time supply chains can be very vulnerable.
As the pandemic hit Europe, the limits of food supply chains were quickly put to the test. Such products as pasta, rice, sugar and canned goods were the first to go out of stock on supermarket shelves.
Such phenomena shake up the food industry, especially the distribution sector, and puts it into combat mode to ensure deliveries and avoid shortages across the continent.
From early March, sales of mass consumer products in the European Union have increased by 5.6 percentage points, while the weekly average growth on these products was 2 percentage points in 2019, according to the benchmark indicator Nielsen. In addition, grocery product sales jumped by 21 percentage points over the first week of March.
"These empty shelves for basics are temporary. This does not worry me. We will be supplied and the refills will be there. What is much more worrying is the disappearance of diversity in the fresh departments in the coming weeks: what about no fish, no salads and vegetables, no tomatoes, no carrots, no bananas or exotic fruit, and of course then, no prepared meals, etc...?" Fred Maeck, a fruit and vegetable buyer in a large Dutch chain store, said.
According to Maeck, the weakest link of the food supply chain was truck transportation. With truck drivers already in short supply, supermarket chains compete for transport companies. This, in turn, could result in customers not being able to find fresh food anymore, which could lead to panic, the buyer said.
"Eating only pasta and tomato sauce is not a solution for long, is it? I think politicians should not have said that there was no problem. There are logistical problems and distribution will be chaotic for some time, especially since the peak of the pandemic will not be identical everywhere. Italy will be the first, but France and Spain will soon follow, then the others will come. It could last for months." Maeck added.
The same phenomenon could affect the pharmaceutical industry because the active ingredients in Europe come from India or China, and production could be stopped if deliveries do not resume to a normal basis.
REACTIONS FROM OPPOSITION IN EUROPEAN PARLIAMENT
Beatrix von Storch, the deputy chairwoman of the AfD parliamentary group in the German Bundestag, insisted on the need to take logistics into close consideration to ensure there were no shortages of essential goods in the country.
"It is like in 2015. The Chancellor [Angela Merkel] is only idle, doing nothing. Moreover now, she is in confinement after having been in contact with a contaminated doctor. The lack of decisive action increases the crisis enormously. And then. Merkel appeals to the citizens' willingness to make sacrifices. And she has no plan for the time after the crisis," von Storch said.
Another member of the European Parliament, Gilles Lebreton of France, told Sputnik he was starting to become worried about food not getting to the population, as the French government was doing everything to discourage transporters and individual truck drivers.
"For example, most toilets are closed on motorway rest areas. The production of Brittany and Normandy [regions] such as cauliflowers, chicken or fish does not reach supermarket distribution centers normally. Harvesting by hand has problems of lack of hands, fishermen do not go out to fish because the price of their catch has slumped. There are no truck drivers available ... It is not yet a dangerous situation, but the food supply chain, famously lean with the 'just in time' approach, is already disrupted," Lebreton said.
According to the lawmaker, French President Emmanuel Macron and his government are late and erratic in their decision-making, despite the brief surge in popularity the leader received after he enacted anti-coronavirus measures. Lebreton believed that his government would pay a high price for their incompetence after the crisis, when citizens take stock of what they have just experienced.
"What a shame for Europe, to see that Russia has to come to the rescue of Italy, or that China sends mouth masks to help Italy, France, Belgium, the Czech Republic and others ... That would be a good reason to abandon the inefficient sanctions regime with Russia, initiated by Europe, but the EU will show, I am afraid, ingratitude towards Russia ... I know the European leaders in Brussels: they are not up to the geopolitical challenges of our days. Look at the way they managed the border issue; complaining that [US President] Donald Trump closes the American borders... and then doing the same a few days later! [Russian] President [Vladimir] Putin demonstrated a long term vision by coming to the rescue of Italy. It honors Russia and I think the Italians will remember it," Lebreton concluded.
When describing the situation in his own country to Sputnik, Pietro Fiocchi, an Italian member of the European Parliament, said that most companies were closed, with some partial clerical work being done from home. Meanwhile, essential services such as elevator repair services or gas stations remained partially open.
"I do not think other Europeans realize how bad the situation is in Italy with between 650 and 850 people dying of COVID-19 every day... With the ports shutting down and a very limited number of carriers still in operation, it is almost impossible to receive and to ship products or raw materials in or out of Italy. It is also true for foodstuffs, like bananas, mangoes or pineapples. Just examples," Fiocchi said.
The lawmaker added that though grocery stores were still open, they were quite empty, and the logistics involved in organizing restocks were failing in many instances. Only Primary goods, such as pasta and canned tomato soup, are still being shipped, Fiocchi added.
"Europe has failed its citizens by not having a plan for such a crisis. It is odd, as NATO has a plan for a bacteriological war. We are in a different kind of war, [a war] against a virus, and the cacophony of uncoordinated actions have been horrible: Italy shutting down flights from China in January, but not the rest of Europe, nations forbidding the shipment of facial masks and ventilators to foreigner nation [within the EU]," the parliament member stated.
As a result, according to the lawmaker, EU citizens do not trust their institutions, a sentiment that could play into the hands of anti-EU parties. He added that the bloc was underestimating the effects of the pandemic on its economy and especially on the "weak" nations like Italy, Portugal and Spain, which could result in a long-standing economic crisis that sends some nations to default.
The lawmaker further stated that he felt the peak of the pandemic could happen within the next five days, during which time most international embargoes and sanctions should be lifted.
"In the short term, shipments of primary necessities (face masks and ventilators, but also gas bottles for oxygen distribution, gas valves, etc.) should be liberalized and controlled against speculators. After the emergency period is finished, I think a positive approach should lead to a lifting of sanctions against Russia. I am sure Italy will not forget that Russia helped us in the Covid-19 crisis," Fiocchi concluded.
The logistics nightmare might not end quickly, since bans will only be gradually lifted at the end of the pandemic, and demand might not rebound quickly.
In addition, a lasting quarantine or travel ban would mean a loss of disposable income for workers in certain areas or industries, and a drop in consumer spending. Both supply and demand might take a long time to recover from the economic damage of the COVID-19 pandemic.
