Developments in 2023
2023 was a turbulent year in more ways than one. There was, and still remains, a great deal of unrest in the world. This has also directly (and indirectly) affected food-producing companies. Examples of this include rising prices in the energy market and an increasing shortage of suitable staff. A great deal has happened in the past year in terms of politics and policy too.
Both the elaboration of the Green Deal and discussions about animal welfare are matters that have a major impact on our companies. With regard to the Netherlands specifically, long-term issues concerning agriculture remain unresolved, not least because the Rutte IV government collapsed in the summer of 2023. A long-term perspective for livestock farming is lacking. At the same time, the government is making funding available to buy out businesses. Unfortunately, schemes for innovation of the sector and relocation of companies have not yet been given concrete form.
Geopolitical relations and market developments also offer opportunities. It is no longer a given that Europe can source raw materials and food globally. Climate change is also affecting the availability of food. The regions where food can be grown structurally are decreasing. The fertile delta in Northwest Europe is a unique region that can continue to play an important role in this production. Our own food strategy is therefore essential to be able to provide the European population with high-quality, sustainably-produced food even in troubled times.
Politics
There is discontent among farmers in several European countries because of increasing regulatory pressure and a lack of prospects. In Europe, people often look to Brussels and the Green Deal in this regard. As far as the Netherlands, social dissatisfaction with policies on asylum, climate and nitrogen, among other things, translated into strong political shifts in the Provincial Council elections in March and the House of Representatives elections in November. The desire of Dutch voters for a different course is evident in both results.
Tensions also ran high in other European member states. This became tangible when large-scale (farmers') protests broke out in Germany in December 2023. These spread to other European countries, including France, Italy and several eastern European member states, at the beginning of the new year.
In 2023, there were two important consultations relating to agriculture and nature: the Convenant Dierwaardige Veehouderij (Agreement on Humane Livestock Farming) and the Landbouwakkoord (Agriculture Agreement). We participated in both consultations via the Dutch Veal Industry Association (Stichting Brancheorganisatie Kalversector, SBK) and the Central Organisation for the Meat Sector (Centrale Organisatie voor de Vleessector, COV). Unfortunately, differences of opinion between interlocutors within the Agriculture Agreement proved too great, as a result of which discussions broke down in June 2023. In December 2023, Piet Adema, Minister of Agriculture, Nature and Food Quality, informed the House of Representatives that it was not possible to conclude an agreement on humane livestock farming at that time.
In June 2023, the National termination scheme for livestock farming locations (Landelijke beeindigingsregeling voor veehouderijlocatie scheme, Lbv) and the Lbv-plus scheme (Lbv-plusregeling) for livestock locations with peak load commenced. Veal farms can participate in the Lvb-plus scheme. By the end of the year, over 130 different veal farms had registered their interest in participating in the scheme.
In addition to the aforementioned buyout scheme, the Minister for Nature and Nitrogen Policy indicated that work is underway on a scheme for the relocation, extensification, conversion or innovation of livestock farms. However, such schemes had not yet commenced in 2023. This has significantly reduced the options available to agricultural entrepreneurs.
Economics
In 2023, the aftereffects of global developments were keenly felt in the raw materials market. This proved highly volatile in the first half of the year. It was only in autumn that some calm appeared to emerge in this market.
Various changes in shareholdings and partnership agreements took place in our organisation:
Letter of intent with Gosschalk
In January 2023, Exportslachterij J. Gosschalk en Zn. B.V. and the VanDrie Group announced the signing of a letter of intent. Although both companies saw promising synergy benefits and opportunities to undertake the necessary development at Exportslachterij J. Gosschalk en Zn. B.V. together, an acute liquidity problem has arisen as a result of the bankruptcy of a Danish customer.
The VanDrie Group said it is not prepared to provide additional financial resources prior to approval by the competition authority and completion of an acquisition audit Exportslachterij J. Gosschalk en Zn. B.V. has subsequently taken the step of cancelling the letter of intent.
Bio Energy Coevorden
In January 2023, fuel and energy company VARO Energy acquired 80 percent of the shares of green gas producer Bio Energy Coevorden (BEC). The VanDrie Group has thus reduced its stake in BEC to 5 percent.
BEC has ambitious plans to meet the increased demand for green gas and other renewable fuels and energy sources in the Netherlands. This still requires major investments to develop green gas production to 100 million cubic metres a year. The entry of VARO Energy makes this possible.
Letter of intent with F&F Group
In September 2023, F&F Group and the VanDrie Group announced they had signed a letter of intent, establishing a partnership between the two companies. Under this agreement, the VanDrie Group will acquire a stake in F&F Group, while F&F Group will in turn acquire Schils Food's business from the VanDrie Group.
F&F Group and VanDrie Group see great potential to expand the position of both companies in the dairy raw materials market through this collaboration. The partnership was submitted to the Netherlands Authority for Consumers and Markets and the European Commission, after which approval was granted in the first quarter of 2024.
Social
Labour market shortages are no longer newsworthy in the Netherlands. However, we are noticing the impact of this on our companies. Employees are in short supply. It is therefore only natural that, on one hand, we focus on recruiting and retaining workers, whether working under contract with us or through hiring agencies.
On the other hand, we are using automation to reduce work pressure wherever possible. We are not alone in these initiatives. For example, the Fair Employment Code of the Central Organisation for the Meat Sector (Centrale Organisatie voor de Vleessector, COV) came into force for our Dutch meat-processing companies in September 2023. The Fair Employment Code aims to contribute to greater security for flex workers, to raise quality standards in hiring and supplying, fair competition, and a level playing field in the sector.
Technology
We feel the intrinsic motivation to keep innovating with respect to themes that are of importance to our organisation. We notice that various stakeholders in different countries also expect this of us. In 2023, a steering group was formed in our organisation with the aim of meeting mandatory reporting requirements by 2026. We are also eager to collaborate on research and projects that enable us to further improve on key issues, such as animal welfare, health, food safety and sustainability.
In 2023, the 'Kijk op het kalf' (View of the calf) initiative by the Dutch Veal Industry Association (Stichting Brancheorganisatie Kalversector, SBK) was continued with the aid of a government subsidy. This subsidy is part of the Netherlands Enterprise Agency scheme 'Pilots gezonde kalverketen' (Pilots promoting a healthy calf chain) and aims to stimulate system innovation in dairy and veal farming and to research the extent to which a system change can contribute to the integral improvement of animal health and welfare opportunities. As part of this, the SBK is collaborating with dairy farmers, veal farmers and Vereniging Kernpraktijken Rundvee (vets). The first results of this research are expected to be shared in 2024.
Our Dutch veal slaughterhouses have been using smart camera surveillance since 2021. These are cameras that use artificial intelligence. In this way, smart camera surveillance can be used to recognise deviations from regular practice, such as overcrowded stalls, agitation, or unnecessary physical contact between an employee and an animal. Smart camera surveillance enables us to improve our processes and protocols based on objective observations, thus ensuring even better animal welfare at our slaughterhouses. This smart camera surveillance was rolled out across the other Dutch veal slaughterhouses in 2023.
You can read more about how we implement these influencing elements in the chapters Our Strategy and Progress on CSR Goals.
