Hein Deprez, chairman of leading fresh produce company Univeg, has told Flemish newspaper De Morgen that the days of cheap food are 'over' and, with margins in the global food sector set to remain small, further mergers and acqusitions activity will be inevitable as major companies look to exert stronger control over the market.
'Food is very cheap today, but those days are over,' Mr Deprez said. 'Whereas today it is almost looked down upon to make money from food, eventually prices will inevitably go up again.'
He added: 'In a market where scale is a must to survive, acquisitions can help companies to secure profits.'
Mr Deprez was speaking about the recent acquisition of fruit and vegetable processing company Scana Noliko by Belgian frozen foods specialist PinguinLutosa, in which Univeg is the majority shareholder.
'Our organisations, market structures, distribution and logistics are based in western Europe,' Mr Deprez told De Morgen. 'Our companies have a strong interest in continuing to operate and generate sufficient turnover, even though we pay on our margins. If our industry wasn't so capital intensive, we would all have moved into emerging markets.'
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