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La Provençale’s headquartrers in Leudelange. Photo: La Provençale 

The food distributor said panic buying and supply problems, not price gouging, accounted for recent cost increases, and the firm itself is taking a major financial hit.

In a statement released on Saturday, La Provençale said the supply of fruit and vegetables had been limited across Europe by a shortage of agricultural workers, increased transport costs and tighter border controls. The company said it has had to pass higher fruit and vegetable prices along to its customers.

According to La Provençale:

“Sales of certain local products, like Luxembourg potatoes, have exploded, but nevertheless prices have remained stable, due to price agreements with our producer. Neither he, nor we, have thought for one second of taking advantage of the current situation.”

On the other hand, La Provençale said meat and poultry prices were stable, fish prices were “volatile” but some farmed fish like salmon could possibly become cheaper in the coming days, and there has been no “abnormal price increases” for dairy products, dried goods and frozen foods. In addition, “we decided not to pass on the increased price” of hydroalcoholic gels.

“Panic buying” had driven up the cost of some other goods, which the company said it also had to pass through to customers.

The firm stated that:

“Continuing our activities under current conditions will lead to a net loss of more than €1m per week for La Provençale. This estimation already takes account of possible state aid that could help us, such as the short-time working scheme in the case of force majeure.”

The company said it employs 1,400 staff.