PARIS: The French food industry faces another difficult year in 2013 as the economic crisis in Europe and a scandal over mislabelled horsemeat continue to weigh on consumers' purchases, the head of industry group ANIA said on Tuesday.
French food makers' sales would rise just 0.5 percent this year, after climbing 2.3 percent to 160.9 billion euros ($210.5 billion) in 2012, ANIA said.
"We are in a worrying deflationary spiral. It is not specific to the food industry but it destroys a lot of value as far as we are concerned," ANIA chairman Jean-Rene Buisson told a news conference on the sector's results.
Members of ANIA, which brings together food processors as opposed to raw food producers, have already reported plans to cut 5,000 jobs in the first half of this year. Last year they shed 3,900, bringing the total number of jobs to 495,000.
Apart from Danone's plan, announced in February, to cut over 200 jobs in France, redundancies would mostly come in small- and medium-sized companies in the processed meat and ready meals sectors which have been hit hard by the horsemeat scandal, Buisson said.
Sales of ready meals have recovered slightly since horsemeat was found in beef-based dishes in mid-January, but were still 10 percent down overall, he said, with pasta-based dishes seeing a 15 percent decline.
Early results of DNA tests ordered in the wake of the scandal showed France found more cases of illegal horsemeat in beef products than any other European Union country, with more than one in every eight samples testing positive.
Buisson stressed that the French food industry would need to regain confidence, citing a studying showing 65 percent of consumers had doubts about it. "We will need to work hard on improving the sector's image," he said.
The French food industry's trade surplus, the second largest after aeronautics, grew last year to 9.2 billion euros, from 8.1 billion in 2011, pulled higher by spirits and grains, ANIA said.
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