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Costs of Belgian food scare seen growing daily

Reuters Story - June 07, 1999 08:56

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By Nieck Ammerlaan

BRUSSELS, June 7 (Reuters) - The cost to Belgium's food industry of the scare over dioxin in meat, meat products and dairy products will run to at least 20 billion Belgian francs ($510 million), the industry's association said on Monday.

"The damage is hard to estimate because it grows every day," Chris Moris of Food Industry Federation FEVIA told VRT radio.

"What we are hearing at the level of individual company managers is that it could easily be 100 million (Belgian francs)," Moris said.

Given that there were at least 200 companies in the sector, the count stood already at 20 billion francs, he said.

As the 11-day crisis, set off by revelations that the cancer-causing chemical dioxin had been found in chicken and eggs, rumbled on, food manufacturers and processors were closing temporarily amid growing consumer worries over food safety.

Belgium's largest chain of butchers, with annual turnover of about eight billion Belgian francs ($203.8 million), shut up shop until Wednesday or Thursday, while supermarkets struggled to replace goods they had been forced to take off their shelves.

On Monday the official list of potentially unhealthy goods was extended again, this time to include butter. Chicken, eggs, pork, beef and related products were already on it.

Two ice cream makers closed plants before switching to Dutch milk despite the lack of a government ban on milk. The companies feared consumers would still be wary of their products after the government warned against selected high-fat produce.

FEVIA's Moris said meat processing firms were suffering from a lack of supplies after the government imposed a transport and slaughter ban, set to last until Tuesday.

"Even if they get supplies from abroad, they have no guarantee that they can export what they bought," he said.

Led by the European Union, a growing list of countries have for now closed their borders to Belgian meat and meat products, with a certain number of those countries applying their trade restrictions to all EU members.

Moris said that if there were no indication as to when the slaughter ban would be lifted, meat processing companies would systematically start closing down, with thousands of employees falling into temporary redundancy.

Firms using eggs as raw materials, such as biscuit makers, had their share of trouble, Moris said, especially since the government decided on Friday to quarantine more products. "On foreign markets the panic has become general," he said.

"Foreign markets are reacting psychologically in the sense of 'in Belgium the situation is completely rotten'. They have seen footage of consumers dumping products in skips," he said.

Over the weekend towns and cities opened dump sites to allow Belgians to get rid of unwanted produce, including chicken, sausage, eggs and mayonnaise.

Moris said Belgian companies had been receiving faxes from abroad cancelling orders and suspending deliveries.

Three Belgian plants of Kraft Jacobs Suchard, part of the Philip Morris group, were at a standstill, unable to supply units of the multinational food giant in other countries, he said.

The Belgian poultry and egg industry has said it too is working on the assumption that the food contamination scare will cost them 20 billion francs.

The Belgian government has put the costs and damages issue on the backburner, emphasising its priority is to determine the scale of the contamination, believed to have orginated from a local fats and oils processing firm, and tackle it.

Without giving figures, the Belgian budget minister has said he feared an impact on this year's budget

Copyright 1999 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

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