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Surging fuel costs loom over Paris wholesale market

Latest update : 2008-06-08

At the Rungis international market outside Paris, wholesalers hit by escalating transport costs are caught in a stranglehold between the woes plaguing suppliers and those affecting their customers.

It’s four in the morning in the Parisian suburb of Rungis, home to the world’s largest wholesale market for fresh produce. Like every other morning, hundreds of lorries have long begun their daily buzz. With little time to waste, truck drivers hailing from all countries are busy unloading and reloading.
“It’s a disgrace, they’re holding us by the throat,” mutters one driver from Brittany, before vanishing into one of the market’s huge warehouses with a pile of crates under his arm.
We head for the vast E4 pavilion, realm of fish and seafood dealers. Here, rising fuel costs are cause for much concern. Indeed, while wholesalers are as yet little affected by the rise in transport costs, they are alarmed by the plight of suppliers and consumers – and its inevitable repercussions on their business.
“We’ll end up paying the price as well, it’s inevitable,” says David Olhagaray, a 35-year-old wholesaler who’s been working here for the past seventeen years. “Soon, fishing boats will be forced ashore, and we’ll be hit in turn. During the recent fishermen’s strike, we were deprived of fish for almost two weeks – meaning we had to rely almost exclusively on imports. Prices doubled, and for some products they even rose threefold.”
In recent years, he argues, prices at the stalls have already risen considerably. Five years ago he used to sell his sardines to fish stores for between 1.20 and 1.50 euros a kilo. Today, they are priced at an average 2.50 euros. “And this increase is mainly down to fuel costs,” he explains.
“No one along the line is filling up his pockets,” says Clément Gilles, president of Agromer, the sea food wholesaler union at Rungis. “But we are caught in a stranglehold between suppliers and retailers, both of whom face enormous costs”.
As a result, tense haggling with retailers, restaurant owners and fish sellers is commonplace. Jacques Gogeard owns a fish store in the south of Paris. This morning, he’s rummaging about the endless piles of crates. “They’re selling their mackerels at my own retail price, how am I supposed to make ends meet!,” he grumbles as he wipes his hands on one of the mandatory white blouses.
“Fish is becoming a luxury item,” he explains. “Households turn to cheaper products, but I can’t pass the increase in costs onto customers, or else the last ones will flee… As a result, I have to nibble at my margins. The longer things go on this way, the fewer fish stores we’ll have left”.

Flower sellers also feel the pinch
It’s six o’clock over at the flower sector, where the atmosphere is somewhat calmer. The great majority of plants sold here come from Europe, particularly the Netherlands.
Here too, the talk is about rising cost prices for producers, increases in transport expenses, and their repercussions for customers. “If prices keep rising, we’ll have to stop importing,” says one wholesaler. “Then flowers will truly become a luxury item, and we’ll have no other option but to shut down”.
Yet, the general malaise is not shared by Maxime François, head of the local federation of cut flower wholesalers. “It’s the producers who are suffering, not us. Frankly, the cost of petrol has practically no impact on our prices. At present, it amounts to just 5% of the total”. In his view, “if French producers are forced to raise prices, wholesalers will simply look abroad”.
However, François believes fuel costs could take their toll on one particular sector, that of flowers imported by airplane.
One of Rungis’ longest standing flower wholesalers, veteran Paul Michel would certainly agree. Most of his products are airborne from South Africa. “Today, the flowers I buy for 1 euro cost a further 1.10 euros to bring over here; that’s over 50% of the cost price! As airlines apply surcharges on fuel, I’m obliged to pass the cost on to my sale price”. As a result, he complains, clients are deserting his stall.
For both Clément Gilles and Maxime François, the two trade union presidents, the market will end up fixing itself. Yet, the process will not be painless. “You just need to count the number of wholesalers,” explains Clément Gilles. “At the start of the 1980s there were over 80 seafood wholesalers in Rungis. Today, we’re just 20”.


Date created : 2008-06-08