Retailers demand more action from EU to resolve Red Sea crisis
EUROPEAN retail industry body Eurocommerce called on European Union institutions and member states to resolve the Red Sea crisis that has disrupted trade, saying in a letter to Belgium’s foreign minister that it has already had “massive impacts” on businesses.
Shipping companies have rerouted container vessels away from the Red Sea to avoid Houthi militant attacks that have multiplied since early December, disrupting supply chains for firms reliant on the Suez Canal to get products from Asia to Europe.
Eurocommerce members include supermarket giants Ahold Delhaize, Carrefour, Lidl, M&S, and Tesco, and fashion retailers H&M, Inditex, and Primark.
“The longer carriers are forced to reroute, the more businesses, and ultimately consumers, will suffer from additional costs adding to the already high costs of living in Europe,” Eurocommerce said in the letter.
Retailers who source from factories in China and South-East Asia have faced delays and cost increases as the alternative shipping route around Africa’s southern tip takes two to three weeks longer, resulting in higher fuel and labour expenses.
The disruption has raised fears that inflation will take longer to unwind in Europe, at a time when cash-strapped consumers were looking forward to prices of food and clothes starting to ease.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“Given the magnitude of the impacts on businesses and the global supply chain, we appeal for continued intensified and coordinated efforts by the EU institutions and Member States to address the situation,” Eurocommerce said.
The group said it supports EU initiatives that aim to protect commercial ships and seafarers against attacks. The EU is set to launch a joint Red Sea naval mission this month. REUTERS
KEYWORDS IN THIS ARTICLE
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Global
Powell reiterates Fed likely to keep rates higher for longer
Biggest Saudi IPO of the year draws US$91 billion in orders
Haidilao restaurant operator Super Hi targets US$1.38 billion valuation in US IPO
UK housing rents driven by record migration, analysis finds
Melinda Gates to step down as co-chair of Bill & Melinda Gates Foundation
IMF staff, Argentina reach agreement on latest review of US$44 billion programme