Belgium Food, Drinks Body Warns “Resilience” At Risk without Intervention

Why It Matters

The warning signals a potential loss of competitiveness for Belgium’s key manufacturing sector, which could depress employment, investment, and the broader supply chain if policy measures are not enacted promptly.

Key Takeaways

• Belgium food sector sales $99.5bn, exports $50bn.
• Labour costs 23% above EU average, hurting competitiveness.
• Federation urges no VAT hikes, lower packaging and excise taxes.
• Companies absorbing cost shocks; investment likely to shift abroad.
• Job growth lowest since 2015, indicating structural sector weakness.

Pulse Analysis

Belgium’s food and drinks industry accounts for nearly a tenth of the nation’s GDP, with $99.5 bn in sales and $50 bn in exports, making it a cornerstone of the country’s trade balance. Yet the sector faces a perfect storm: soaring energy and raw‑material prices driven by the Middle‑East conflict, and a labour market that costs more than 23% above the EU average. These pressures are compressing margins, forcing firms to absorb costs rather than raise consumer prices, and eroding the competitive edge that once made Belgium a food‑manufacturing hub.

Fevia’s appeal for policy relief centers on tax and cost levers that could restore profitability. A freeze on value‑added tax, reductions in packaging and excise duties, and a more predictable wage‑indexation framework are seen as essential to curb operating expenses. By lowering electricity tariffs and aligning Belgium’s tax regime with neighboring countries, the government could stem the outflow of investment and protect jobs. The federation also highlights that stagnant domestic demand and waning export momentum—particularly in the United States—compound the sector’s vulnerability, underscoring the need for a coordinated fiscal response.

If the government does not act, the sector risks a cascade of negative outcomes: delayed capital projects, relocation of production facilities to lower‑cost jurisdictions, and a slowdown in employment growth that has already hit its lowest level since 2015. Such a shift would reverberate through agriculture, logistics, and hospitality, weakening the entire agri‑food value chain. Policymakers therefore face a narrow window to reinforce resilience, preserve Belgium’s status as a food‑export powerhouse, and safeguard the broader economy from a sector‑wide downturn.