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European currency gyrations, EC squabbles make for unsettled Danish business climate.

Danish frozen food exporters suffered badly from the tremendous fluctuations in currencies that rocked commerce last September as the European Exchange Rate Mechanism came under fire. Not only did proceeds from deliveries made earlier to Sweden, Italy, the United Kingdom and elsewhere drop considerably in value, but suppliers were faced with a groundswell of canceled orders in response to upward price adjustments imposed to offset the diminished buying power of lower-valued monies.

This is the type of conflict that the ECU is supposed to overcome. Unfortunately, economic strains have now effectively pushed realization of the goal of a common European currency past the year 2000.

An executive with Odense-based baked goods producer Mette Munk A/S told this reporter that he had to settle for a moderate and far from satisfactory price increase in the UK in order to protect its share in that important market. At the same time, sales efforts were intensified in Germany.

Meanwhile, for the second time in less than a year bankruptcy is knocking at the door of DFO. The renowned frozen foods home delivery company's troubles can in part be traced to the extremely competitive price-cutting on the Danish retail market. Another reason may have something to do with the fact that three different owners have run the company since founder Kjeld Jorgensen sold the then-thriving enterprise and retired to England about 10 years ago.

If DFO goes under it will mark the passing of an era in Denmark's frozen food development. Jorgensen, who died last summer at the age of 68, got into the fledgling QFF business in the early 1950s by selling home freezers directly to private households. At that time Danes stocked their own ice boxes with garden vegetables, felled game and fresh-caught fish, not to mention the occasional half-pig bought on the black market.

When freezer sales slowed, the entrepreneurial and inventive Jorgensen decided to shift gears and offer deliver of basic frozen foods to homes. Since very few stores carried frozens at the time, his idea grew rapidly into a substantial production, procurement and distribution business. The concept eventually spread to other countries, charting major success in Germany.

Hats Off to Hatting

On a positive note, Hatting Bagery has reported its best year ever. Turnover rose 65% over 1991 and profits advanced sharply Three-quarters of the volume increase was attributed to business realized from the acquisitions of a Norwegian bakery and a Swedish distribution company.

A specialist in frozen bread, more than 100,000 units leave Hatting's ovens every hour. Sixty-six percent of sales are derived from exports, with rye baguettes and bakeoff pastries in great demand from buyers in the UK and Germany.

Frozen Sun Rising

At least two Japanese concerns have invested in developing frozen food assets in Denmark. Kyodo Oil's new factory is producing gyoza snack foods. The product is being sold not only to the growing Japanese community in Europe, but also to Continentals with a yen for Asian cuisine.

The Aoki Company will pack sushi (raw fish on rice) in a Danish plant presently being equipped. Its range was recently showcased at the SIAL Exhibition in Paris (see related story on page 126). Rice used in the sushi, incidentally, is imported from California at a fraction of the price charged for Japanese-grown rice. Such low-cost sourcing would be illegal if the product were made in Japan, where inefficient rice farmers enjoy government protection from competition.

Daloon A/S, the spring roll manufacturer, was a close runner-up in the Golden Pinguin competition sponsored by the Danish Frozen Food Association. Its entry, a single-portion microwaveable souffle, has thus far been less than a hit on the domestic retail scene. But export-minded Hemming Van, second generation proprietor, says that the product has been far more popular among institutional buyers in Germany.

Catering appeal is also the mark of Daloon's other recent innovation: a miniature, 20-gram version of the highly successful spring roll. Not yet available to consumers in Denmark, most production is being shipped directly to the German market, where McDonald's has ordered several million units to be introduced in 400 outlets nationwide under its Chinese Lang Tse menu.

In Waiting

While Denmark's frozen food export engine drives on, the smoke of uncertainty overhangs the Continent's highways of commerce. Since the referendum on the Maastricht Treaty last June, the political pendulum has swung against Denmark's future position in the new European Community (EC), and perhaps even past its slot in the old European Economic Community (EEC).

The thinking among some citizens is that integration with the Continent is not in their best interest. Sometimes they are right, but more often they are left-left wing, that is.

In the Danish referendum, 3,290,610 ballots were cast, representing 83% of those eligible to vote. Some 50.7% expressed opposition to the Treaty's terms, with 49.3% in favor. The plurality amounted to just 46,567 votes.

The Irish referendum a few weeks later produced an overwhelming pro-Maastricht result. France, on Sept. 20, turned in as slim a victory for the treaty as the Danes' margin was against it.

No other Community member state intends to let a referendum decide its European destiny. On the contrary, most of them have already ratified their parliamentary acceptance of the treaty in full, or will have done so before the Jan. 1, 1993, deadline. The United Kingdom alone has decided to postpone its ratification procedure until Denmark's position has been clarified.

Political maneuvering, of course, is fast and furious. The Danish People's Socialist Party, which was mainly responsible for the country's "no" vote, is intent on overthrowing the Liberal-Conservative minority government. It wants to form a majority coalition with the Social Democrats, who have been out of power for the past 10 years. So they have set out to design a "national" compromise, which lacks every bit of quality and craftsmanship ordinarily associated with Danish design. And they gave it to the government to go canvassing with among the EC, which requires unanimous consent of all 12 members to ratify Maastricht.

"Well," said a sensible onlooker, "would not addenda recognizing, for the time being, the Danish reservations concerning five out of seven main themes of the treaty text be a more acceptable Community compromise? Though it would still leave Denmark in waiting, then at least for better rather than for worse."

"No," insisted a Danish Socialist. "The referendum result was negative and we read that to mean that Danes want no common currency or central bank, no Community armed forces, no EC social security, no Community police force, and no European citizenship - not now, and not ever. And that is final! But we still want, of course, to remain a highly respected member of the Community."

If Foreign Minister Uffe "Mr. Europe' Ellemann-Jensen and his 11 colleagues can find a way out of this deadlock, then they are obvious collective candidates for the Nobel Prize.

In the meantime, everyone waits. The Danish government waits for the Socialist opposition. Britain waits for Denmark. Sweden, Norway, Finland, Austria and Switzerland wait for the Community So do the countries of Eastern Europe, in particular those in militant dispute. Europe waits for US President-elect Bill Clinton, and Clinton himself waits for Jan. 20 to assume power. But who could blame the Americans if they end up telling the Continent to start looking after itself for a change.

Deep Freezing Magic

Speaking of the Americans, in July of 1942 six of their Air Force's P-38 Lightning fighters and two B-17 bombers made emergency landings in Greenland due to heavy weather. The crews were safely rescued. The planes, however, were left to be covered with layer upon layer of snow and ice.

Since 1981 enthusiasts have searched for the aircraft, and this summer they located the frozen squadron under 80 meters of ice.

"One on the P-38s was undamaged and so well preserved that, were it not that we had to take it apart and pull the pieces up through a hole 80 meters deep and only one meter wide, we could have flown it away. Now we have to wait until we can put it together again back home," said one of the Americans on the scene.
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Title Annotation:News from Europe; frozen food industry exports
Author:Emborg, Henrik
Publication:Quick Frozen Foods International
Date:Jan 1, 1993
Previous Article:Frigoscandia extends cold store reach with acquisitions in France, Germany.
Next Article:Supermarket of frozen food products served up at SIAL exhibition in Paris.

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