Retailers demand more EU action to resolve Red Sea crisis

European retail industry body Eurocommerce has 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 ” massive impacts” on companies.

Shipping companies have diverted container ships away from the Red Sea to avoid attacks by Houthi militants that have multiplied since early December, disrupting supply chains for companies that rely on the Suez Canal to bring goods 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 divert, the more businesses and ultimately consumers will suffer additional costs adding to the already high costs of living in Europe,” Eurocommerce said in the letter.

Retailers sourcing from factories in China and Southeast Asia have faced delays and cost increases as the alternative shipping route around the southern tip of Africa takes 2-3 weeks longer, resulting in higher shipping costs. fuel and labor.

The disruption has raised fears that inflation will take longer to ease in Europe, at a time when cash-strapped consumers expected food and clothing prices to start falling.

“Given the magnitude of the impacts on businesses and the global supply chain, we call on EU institutions and Member States to continue to intensify and coordinate efforts to address the situation,” Eurocommerce said.

The group said it supports EU initiatives that aim to protect commercial ships and seafarers from attacks. The EU will launch a joint naval mission in the Red Sea this month.