Companies are in danger of getting into financial trouble due to the sharply rising gas prices. The price increases have major consequences for profits in sectors such as greenhouse horticulture, heavy industry and the hospitality industry. This is apparent from a report published Monday by ABN Amro. The problems will persist until at least 2023.
Companies that do not pay fixed energy rates and have small profit margins will take the heaviest blows. Compared to 2019, the price for natural gas is 3.5 times higher. Companies in the chemical industry could see their “entire profit wiped out” if they fail to find a solution. Figures from the Central Bureau of Statistics show that this sector booked a gross profit of 3.5 billion euros in 2019. Energy costs amounted to 1.8 billion euros.
Companies will have to recoup the extra energy costs by charging higher prices for their products. Whether that is possible depends on various factors such as competition, contracts with suppliers and the demand for their products. If compensation through higher asking prices is not successful, companies risk ending up in the red. Government support could cost many billions, ABN Amro expects.
More expensive fruit and vegetables
Greenhouse horticulture tops the list with twenty sectors that are most vulnerable to rising energy costs, according to ABN. In 2019, 15 percent of the total turnover in the sector went to energy. To limit major negative consequences for their profits, glasshouse growers will have to empty their greenhouses partly or completely, the sector association Greenhouse Horticulture Netherlands warns in the ABN report. Some growers choose to illuminate their greenhouses less, ABN continues. This all has consequences for production and therefore also for the consumer.
Charging higher prices for fruit and vegetables is only possible if competitive growers in Spain or Morocco deliver less. The food industry is already able to pass on the increased energy costs, concludes ABN Amro. The food price index – which shows the average price of food – of the Food and Agriculture Organization of the United Nations (FAO) reached its highest point in ten years in September.
Companies are in danger of getting into financial trouble due to the sharply rising gas prices. The price increases have major consequences for profits in sectors such as greenhouse horticulture, heavy industry and the hospitality industry. This is apparent from a report published Monday by ABN Amro. The problems will persist until at least 2023.
Companies that do not pay fixed energy rates and have small profit margins will take the heaviest blows. Compared to 2019, the price for natural gas is 3.5 times higher. Companies in the chemical industry could see their “entire profit wiped out” if they fail to find a solution. Figures from the Central Bureau of Statistics show that this sector booked a gross profit of 3.5 billion euros in 2019. Energy costs amounted to 1.8 billion euros.
Companies will have to recoup the extra energy costs by charging higher prices for their products. Whether that is possible depends on various factors such as competition, contracts with suppliers and the demand for their products. If compensation through higher asking prices is not successful, companies risk ending up in the red. Government support could cost many billions, ABN Amro expects.
More expensive fruit and vegetables
Greenhouse horticulture tops the list with twenty sectors that are most vulnerable to rising energy costs, according to ABN. In 2019, 15 percent of the total turnover in the sector went to energy. To limit major negative consequences for their profits, glasshouse growers will have to empty their greenhouses partly or completely, the sector association Greenhouse Horticulture Netherlands warns in the ABN report. Some growers choose to illuminate their greenhouses less, ABN continues. This all has consequences for production and therefore also for the consumer.
Charging higher prices for fruit and vegetables is only possible if competitive growers in Spain or Morocco deliver less. The food industry is already able to pass on the increased energy costs, concludes ABN Amro. The food price index – which shows the average price of food – of the Food and Agriculture Organization of the United Nations (FAO) reached its highest point in ten years in September.
Companies are in danger of getting into financial trouble due to the sharply rising gas prices. The price increases have major consequences for profits in sectors such as greenhouse horticulture, heavy industry and the hospitality industry. This is apparent from a report published Monday by ABN Amro. The problems will persist until at least 2023.
Companies that do not pay fixed energy rates and have small profit margins will take the heaviest blows. Compared to 2019, the price for natural gas is 3.5 times higher. Companies in the chemical industry could see their “entire profit wiped out” if they fail to find a solution. Figures from the Central Bureau of Statistics show that this sector booked a gross profit of 3.5 billion euros in 2019. Energy costs amounted to 1.8 billion euros.
Companies will have to recoup the extra energy costs by charging higher prices for their products. Whether that is possible depends on various factors such as competition, contracts with suppliers and the demand for their products. If compensation through higher asking prices is not successful, companies risk ending up in the red. Government support could cost many billions, ABN Amro expects.
More expensive fruit and vegetables
Greenhouse horticulture tops the list with twenty sectors that are most vulnerable to rising energy costs, according to ABN. In 2019, 15 percent of the total turnover in the sector went to energy. To limit major negative consequences for their profits, glasshouse growers will have to empty their greenhouses partly or completely, the sector association Greenhouse Horticulture Netherlands warns in the ABN report. Some growers choose to illuminate their greenhouses less, ABN continues. This all has consequences for production and therefore also for the consumer.
Charging higher prices for fruit and vegetables is only possible if competitive growers in Spain or Morocco deliver less. The food industry is already able to pass on the increased energy costs, concludes ABN Amro. The food price index – which shows the average price of food – of the Food and Agriculture Organization of the United Nations (FAO) reached its highest point in ten years in September.
Companies are in danger of getting into financial trouble due to the sharply rising gas prices. The price increases have major consequences for profits in sectors such as greenhouse horticulture, heavy industry and the hospitality industry. This is apparent from a report published Monday by ABN Amro. The problems will persist until at least 2023.
Companies that do not pay fixed energy rates and have small profit margins will take the heaviest blows. Compared to 2019, the price for natural gas is 3.5 times higher. Companies in the chemical industry could see their “entire profit wiped out” if they fail to find a solution. Figures from the Central Bureau of Statistics show that this sector booked a gross profit of 3.5 billion euros in 2019. Energy costs amounted to 1.8 billion euros.
Companies will have to recoup the extra energy costs by charging higher prices for their products. Whether that is possible depends on various factors such as competition, contracts with suppliers and the demand for their products. If compensation through higher asking prices is not successful, companies risk ending up in the red. Government support could cost many billions, ABN Amro expects.
More expensive fruit and vegetables
Greenhouse horticulture tops the list with twenty sectors that are most vulnerable to rising energy costs, according to ABN. In 2019, 15 percent of the total turnover in the sector went to energy. To limit major negative consequences for their profits, glasshouse growers will have to empty their greenhouses partly or completely, the sector association Greenhouse Horticulture Netherlands warns in the ABN report. Some growers choose to illuminate their greenhouses less, ABN continues. This all has consequences for production and therefore also for the consumer.
Charging higher prices for fruit and vegetables is only possible if competitive growers in Spain or Morocco deliver less. The food industry is already able to pass on the increased energy costs, concludes ABN Amro. The food price index – which shows the average price of food – of the Food and Agriculture Organization of the United Nations (FAO) reached its highest point in ten years in September.