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Surprise! European cold store scene overflowing with intervention stocks.

Surprise! European Cold Store Scene Overflowing With Intervention Stocks

Space especially tight in Germany, where producers have had to look abroad for storage capacity. Meanwhile, EEC legislation and CFC replacement issue loom large.

This time last year, many thought that the storage of intervention beef and butter surplus production that is purchased by the EEC and taken off the market, which had taken up so much space and had concentrated marketing efforts, was destined to be a thing of the past. But as the public cold storage industry is cyclical, here we are once again with the need for storage of large quantities of beef as well as some butter. Indeed the decline in beef consumption that followed the scare over mad cow diseases, and the reduction of some traditional export markets including Iraq, resulted in a price slide that prompted the EEC to intervene with beef purchases in support of the commodity. Consequently available cold store space in several countries (Germany in particular) has been unable to handle all the products coming forward, and tonnage has had to be stored in other EEC countries.

Irish Commissioner Ray MacSharry, who is responsible for the Common Agricultural Policy (CAP), has proposed massive cutbacks in subsidies for agricultural produce. Not surprisingly, at press time he did not seem to be getting much support from countries with vociferous farm lobbies. This is pointed out to illustrate that the cold storage industry is dependent on the whims of politicians, which makes forward planning real guesswork.

Distribution of temperature controlled food varies considerably throughout Europe. In the UK members of the National Federation are extensively involved in third party distribution which has been developed into a most sophisticated business. In Continental Europe and in the Irish Republic such has not taken off in the same way. Whether this will be a great opportunity or a huge problem area is being discussed at length, and this writer is not going to try to predict the outcome.

As the EEC approaches 1992 -- or rather Jan. 1, 1993 -- and the arrival of the Single European Market, we are being inundated with legislation to harmonize controls throughout Europe. The perishable food industry has had its share of attention from the lawmakers. Quick frozen food products, as of Jan. 10, 1991, are subject to a Directive which requires that they be held at -18 [degrees] C (0 [degrees] F) or colder throughout the cold chain. A few tolerances will be permitted during the first few years for local distribution, and in the retail cabinet. Frozen food not branded as "Quick Frozen" (or its corresponding translation in non-English languages) does not come under this Directive. The approved method of monitoring temperature is still being formulated. Those in the cold store industry await with interest to see how all this develops.

Refrigerated warehouses after 1992 will have to be approved by the EEC veterinary officers if they wish to handle fresh meat (which includes frozen meat). Many of the requirements to achieve approval are based on the standards established by slaughterhouses and meat cutting plants. The authorities seem to forget that while it is necessary for slaughterhouses to have properly drained floors, drainage systems, washable walls and ceilings, it is hardly the same for cold stores operating at low freezing temperatures.

Food imported from third countries into the EEC will be subjected to new health check regulations. The big problem is that health checks will have to take place at the port of landing. This means that produce cannot be transported inland or to other EEC countries until cleared, which could take up to 48 hours. Trouble and delays are foreseen as shipments are held up.

As for CFC refrigerants, cold store operators are all very conscious of the need to play their part in conserving the ozone layer. However, in Europe we are trying to be "Greener than Green" with a ban on production and importation of the Montreal Protocol controlled gases brought forward to 1997. In most countries there is no restriction on R22, with the exception of Germany which wants to include it with the other controlled gases. This will prove to be an interesting test of the Single European Market come 1993! The use of CFCs is not to be controlled, therefore the need for very careful attention to overcoming leaks during repairs and maintenance cannot be over emphasized.

The industry is also very concerned about the pressure being placed on gas manufacturing companies to quickly invent, test and produce new, ozone friendly, non-global warming gases in commercial quantities. The fear is that the time scale is so short that cold store operators will not be given any say in the suitability of the new gases. We may very well have no option but to accept gases which are energy inefficient (increasing the global warming trend) and which require high capital expenditures to modify or re-plant refrigeration systems. With more time these problems could be overcome. The other fear is that the gas manufacturers, if pressed too hard, may decide to stop the search for new gases and cease production altogether. After all, CFCs are an insignificant part of their total gas production.

Certainly, the next few years are going to be very interesting ones. Our industry has seen many changes before. We are flexible and can adapt to be able to cope with almost anything that is thrown at us. What is more, we will have to do so without EEC or government financial support.

Mr. Shearer is president of both the Brussels-based European Cold Storage Association (AEEF) and London-headquartered Cold Storage and Distribution Federation (CSDF). Recently taking early retirement as managing director of LBS Cold Stores Ltd. in England (now doing business as the TDG Storage Division of the Transport Development Group Plc), he has become a consultant to the food industry.
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Title Annotation:Warehousing World
Author:Shearer, Donald I.
Publication:Quick Frozen Foods International
Date:Apr 1, 1991
Previous Article:Baked goods sales seen hot in '90s, with frozens to rise 9.3% annually.
Next Article:Is the cold war really over? Europe makes a breakthrough.

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