Panic buying and subsequent food scarcity may have driven up prices at the start of confinement measures in Luxembourg, according to Georges Eischen, managing partner at Luxembourg wholesaler La Provençale, but as restaurants closed, driving down consumption in Europe, “there’s a surplus of everything, so prices have a tendency to fall.”

Dairy products are among the worst hit, he says, as restaurants tended to use more cream and fat products in their cooking than private households. “Before prices weren’t cheap or high but now they will become more so and the producer won’t make any money that’s for sure,” Eischen told Delano on Wednesday.

There are of course some labour intensive exceptions, asparagus being the key one, largely because the seasonal workers who normally pick them are now stuck in their respective countries.

“The [asparagus] producers are finding themselves in front of fields full of produce that they cannot pick. It’s becoming less available and more expensive,” Goy Grosbusch, general manager of Grosbusch, another wholesaler, told Delano on 8 April.

This is just one example in which border closures have massively disrupted the supply chain for local retailers. Grosbusch said the reorientation of Cargolux airfreight to essential medical supplies has made it harder to source popular products from further afield. His firm has gotten around it by finding alternative suppliers. “We’re lucky we work with 700 suppliers worldwide,” he said.

Goy Grosbusch is pictured right in a 2016 family photo with sister Lyn and father René (centre).  The firm employs around 300 people. Photo: Mike Zenari/Maison Moderne

The difficulties show just how tight logistics margins are in the supply chain. Eischen said that overland deliveries were being hampered by the fact that drivers from southern Europe are normally expected to return with a full load of goods. As harvesting has slowed and border bureaucracy becomes more restrictive, they now return empty and have to “ask double the price [for haulage] or they can’t pay their bills.” Another issue is the lack of sanitary facilities for drivers on motorways. “There are some problems, but it doesn’t make it completely impossible,” Eischen said of the overall situation.

With so much of their business tied up in the food and catering sector, both wholesalers have had to rework their business models. La Provençale, for which deliveries account for 95% of its business, on Monday launched an online ordering facility by which customers can collect their orders on site.

For Grosbusch the catering sector represented 50% of its turnover. To avoid waste, when restaurant closures were announced, it gave some stock to charity and sold the remaining produce destined for restaurants to the public at low prices. “We lost a lot of our turnover, but on the other hand we’ve supermarkets who are progressing a little bit more than in usual times because everyone has to stay at home and cook at home, which means these volumes are going up,” Grosbusch said. Three weeks ago the firm also launched a home grocery delivery service, demand for which is far exceeding expectations.

Photo shows the La Provençale store in Leudelange. The wholesaler currently employs 1,400 people. Photo: La Provençale

In mid-April, the Luxembourg government is expected to explain how it proposes to restore economic activity to pre-crisis levels. Even if restaurants open again soon, neither was not confident the struggles would end that quickly. “The whole business model changed that much it’s hard to foresee how long we can stay with these kinds of activities,” Grosbusch said.

Despite some aid and loans offered to entrepreneurs, Eischen said was note enough and if the government did not offer more, companies would suffer a slow death, impacting the wider economy. “Let’s be realistic, activity won’t start at 100% from the first day. I speak about restaurants, but it is also true for the tourism industry,” Eischen said.