Increase Foodsector Bankruptcies

The trend of a decline in the number of bankruptcies of companies and institutions ended in the summer of 2018. Worldwide, there was uncertainty about trade wars and the Brexit. The food sector will also be affected by bankruptcies.

Slight increase in insolvencies in the food sector

The number of bankruptcies in the food sector is rising. The number of bankruptcies rose, especially among the larger companies. Fewer businesses went bankrupt in the one-man business. The food sector comprises a broad group of companies. The common denominator is dependence on raw material prices and export markets. An important part of the production goes to countries in Europe. Lower growth in Europe can therefore be a source of concern for the sector.

Food sector's bankruptcy rate relatively high

The food sector has a relatively high insolvency rate. This applies to both the food industry and the wholesale of foodstuffs. Thin margins and fierce competition mean that entrepreneurs in the food sector have to operate at the cutting edge.

Expectations for the food sector

ABN AMRO expects the number of bankruptcies in the food sector to increase by 2 to 5 percent in 2019 compared to 2018. Higher prices, such as for pigs and dairy products, may cause difficulties for entrepreneurs who are already struggling with thin margins.

Source: ABN AMRO