“Vienna sugar”, probably Agrana’s best-known product, comes from Tulln and should stay that way if possible.
Agrana boss Stephan Büttner rails against the difficult political and economic conditions – especially the expensive bureaucratic burdens. But he wants to preserve the traditional location of Tulln (founded in 1937) with all his might. “And I assume that we will succeed,” said Büttner on Thursday in the business journalists’ club.
After the end of Leopoldsdorf, Tulln is the last remaining sugar factory in Austria. According to Büttner, he could give a guarantee for the work, but he had no security to offer for it. In this respect, the guarantee is de facto worthless. This means: If the farmers no longer deliver sugar beets due to the massive drop in prices, that would also be the end of production in Tulln.
In general, Agrana as a whole is undergoing painful change due to the extremely difficult market conditions in the sugar and starch segments. The relatively new business area “Food & Beverage Solutions” – from fruit preparations for yoghurts to flavors – is doing very well.
Painful steps
This does not change the need for the “Next Level” program to reduce costs and increase efficiency, which is designed to run for three financial years until 2027/28. “We are in the middle of a transformation. Very painful decisions have to be made,” says Büttner.
The program that has already been presented includes the reduction of 400 to 500 employees out of a total of around 9,000 – the majority in Austria. As well as the goal of saving over 100 million euros annually from 2027/28.
Negative for location
But overall things are not particularly rosy for the food industry, says Büttner, who has also been chairman of the food and beverage industry since the summer. Because the economic situation in Austria with – roughly simplified – the “lowest growth and the highest inflation” is “a drama” for the industry, two thirds of which are active in exports. “If we continue to lose competitiveness, it will of course have a negative impact on the location,” says Büttner.
The Agrana boss is naturally not a fan of the debate about a sugar tax, but generally rails against EU bureaucracy monsters, from the supply chain law to the deforestation regulation. He sees the danger of de-industrialization in Europe.
Someone has to pay for living standards
In Austria you always have to ask yourself when it comes to food: what is it worth to us? Because you can’t keep wages, production and ultimately prosperity high in the long term, but always want the cheapest product. “You have to say that someone has to pay for it,” says Büttner about the debate about retail prices, “shrinkflation” or the Austrian surcharge.
Büttner’s recipe is quite simple: “You would need more competition, then you would have lower prices.”