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Technology and employment in the food and drink industries

Report for discussion at the, Technology and Employment in the Food and Drink Industries

Geneva, 18 - 22 May 1998

International Labour Office   Geneva

Copyright ® 1999 International Labour Organization (ILO)

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Foreword

This report has been prepared by the International Labour Office as the basis for discussions at the Tripartite Meeting on Technology and Employment in the Food and Drink Industries. It examines recent developments in the food and drink industries and new technology that has been adopted in these industries with a view to illustrating their impact on employment and working conditions.

Background to the Meeting

The Meeting is part of the ILO's Sectoral Activities Programme, the purpose of which is to facilitate the exchange of information between constituents on labour and social developments relevant to particular economic sectors, complemented by practically oriented research on topical sectoral issues. This objective has traditionally been pursued by the holding of international tripartite sectoral meetings for the exchange of views and experience with a view to: fostering a broader understanding of sector-specific issues and problems; promoting an international tripartite consensus on sectoral concerns and providing guidance for national and international policies and measures to deal with the related issues and problems; promoting the harmonization of all ILO activities of a sectoral character and acting as the focal point between the Office and its constituents; and providing technical advice, practical assistance and concrete support to ILO constituents in order to facilitate the application of international labour standards in the various economic sectors.

At its 267th Session (November 1996), the Governing Body of the ILO decided that a tripartite meeting on technology and employment in the food and drink industries would be included in the programme of sectoral meetings for 1998-99. At its 268th Session (March 1997), the Governing Body further decided that the governments of the following 20 countries should be invited to be represented at the Meeting: Burundi, Chile, China, Egypt, France, Ghana, India, Italy, Japan, Lebanon, Mexico, Morocco, Nicaragua, Nigeria, Portugal, Thailand, Turkey, United Kingdom, United States and Uruguay. A number of countries were included in a reserve list from which further invitees would be drawn in the event that a government in the first list did not accept the invitation. The Governing Body decided that the 20 Employer and 20 Worker participants in the Meeting would be appointed on the basis of nominations made by the respective groups of the Governing Body. They will not necessarily come from the above list of countries.

Background to the report

The food industry presents many facets, from the traditional labour-intensive activities often found in developing countries to the capital-intensive industrial processes common in the industrialized world. It includes slaughtering, preparing and preserving meat; milling grains and manufacturing bakery products; canning and preserving fish products, fruits and vegetables; manufacturing vegetable and animal oils and fats and animal feeds; and processing sugar, coffee, tea, etc. In addition to first-stage processing, the food industry today is increasingly engaged in the manufacturing of higher-stage processed products such as convenient and ready-to-eat frozen foods. The drink industry covers such activities as distilling and blending spirits; and processing malt, malt liquors, wine, soft drinks, fruit juice, milk, mineral water and so on.

The ILO's Sectoral Activities Programme covers the food and drink industries in countries at all stages of development. Inevitably, however, most of the data readily available on the topic of the Meeting come from industrialized countries. Because of this necessity, and not by choice, the report underemphasizes the experience of FD industries in developing countries, although it does demonstrate that it is in these countries that FD output and employment are growing most rapidly. While some information on developing countries has been included, it mostly concerns large enterprises.

The report was prepared by Shizue Tomoda, Food and Drink Industries Specialist. It incorporates excerpts from case-studies prepared by J.A. Burns with Marian Garcia, Todd Cherkasky, Anselmo García, Andrés Hernandez and Leonard Mertens, Judit Kiss, Naoki Kuriyama and Veena Nabar. Information has also been provided by employers' and workers' organizations affiliated with the International Organization of Employers (IOE) and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations (IUF). The rest has been collected from a variety of sources by the author with the assistance of ILO offices and also through the author's own research work. All help is gratefully acknowledged.

The report is published under the authority of the International Labour Office. It is hoped that the information and analysis provided herein will serve as a useful basis for discussion during the Meeting.


Contents

Foreword

1. Recent trends in the food and drink industries

2. Recent technological changes in the food and drink industries

3. Impacts of new technology on employment

4. Impact of new technology and structural change on working conditions

5. Coping with the effects of technological and structural change

6. Environmental issues

7. Summary and points for discussion

Tables

1.1 Index numbers for the industrial production of food products (ISIC 311), 1985-95

1.2 Index numbers for the industrial production of beverages (ISIC 313), 1985-95

1.3 Output in food products as a percentage of total manufacturing output, 1985-95

1.4 Output in beverages as a percentage of total manufacturing output, 1985-95

1.5 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in the G7 member countries in 1980 and 1994

1.6 Total manufacturing value added (MVA), total value added in the FD industries (FDVA) and the proportion of FDVA as a percentage of MVA in some ASEAN countries in 1980 and 1994

1.7 Distribution of world value added in the food and drink industries, 1980-93

1.8 Distribution of value added in the food and drink industries among developing regions, 1985 and 1992

1.9 Leading food producers among developing countries, 1985 and 1994

1.10 United States: Personal consumption expenditure on food and drink products in 1997 and 1993, and projected 2005

1.11 Index numbers of global food export and import value, by region, 1988-95

1.12 Australian exports and imports of food and drink products and their proportion of total manufacturing exports and imports, 1989-95

1.13 European Union: Exports and imports of food, drink and tobacco products to and from the countries outside the European Union, 1985-95

1.14 Value of Japanese exports and imports of foodstuffs and their proportion of total exports and imports, 1980-95

1.15 United States: Exports and imports of food and kindred products, by value and proportion of total manufacturing exports and imports, 1985-95

1.16 Hungary's foreign trade in food, beverages and tobacco products, 1993-95

1.17 Germany (former FRG): Gross capital investment per worker in the food industry and in manufacturing, 1988-92

1.18 Investment distribution in Hungarian food and drink industry investments, 1990-95

1.19 India: Capital intensity in the food-processing industry

1.20 United Kingdom: Net capital expenditure and gross value added per head in the food and drink industries as compared with the tobacco industry, 1986-93

1.21 United Kingdom: R & D expenditure in food and drink companies, 1995

1.22 United States: Total investment in new plants and equipment in the food industry (SIC Code 20), 1987-95

3.1 Employment in food products (ISIC 311), 1985-95

3.2 Employment in beverages (ISIC 313), 1985-95

3.3 Employment in food products as a percentage of employment in total manufacturing, 1985-95

3.4 Employment in beverages as a percentage of employment in total manufacturing, 1985-95

3.5 European Union: Employment in the FD branches in 1995 and changes since 1988

3.6 Germany: Employment trends in the food and drink industries, 1985-95

3.7 United Kingdom: Employment in the food industry, 1980 and 1992 (Census of production groups: SIC 1980)

3.8 Employment in Hungarian food and drink industries, 1992-95

3.9 United States: Total employment and the proportion of production workers in the food, beverages and tobacco industries, by subsector, 1991-95

3.10 India: Employment in the food and drink industries by branch

3.11 Nigeria: Employment and number of establishments in the food and drink industries, 1992-96

3.12 Germany: Per capita productivity index in the food industry and total manufacturing, by category of workers, 1988-93

3.13 Hungary: Productivity index in the food and drink industries, by branch, 1994-95

3.14 Malaysia: Fixed assets and added value per employee in the food industry and manufacturing, 1985-92

3.15 United Kingdom: Production, employment and output per worker in total manufacturing and in the food, drink and tobacco industries, 1989-96

3.16 United States: Index numbers of hourly output, by sector, 1988-95

3.17 Japan: Number of employees and the proportion of part-time workers in food-processing industries, by sex and size of establishment, 1992-96

3.18 United Kingdom: Employment in the food, drink and tobacco industries, by sex, category of worker and percentage change, 1993-96

3.19 Belgium: Employment in the food and drink industries, by sex and category of worker, 1991-95

3.20 United States: Employment trends in the food industry, 1990-96

4.1 Wages per worker in food products as a percentage of wagesper worker in total manufacturing, 1986-95

4.2 Wages per worker in beverages as a percentage of wages per worker in total manufacturing, 1985-95

4.3 Women's average weekly hours of work as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.4 Women's average hourly earnings as a percentage of men's in total manufacturing and in the food and drink industries, 1985-95

4.5 Australia: Average per capita annual earnings in the food and drink industries and in total manufacturing, 1989-93

4.6 France: Average hourly wages in the cooperative sector of the meat and poultry industries, by category of worker, 1991-94

4.7 Germany: Annual hours of work per worker in the food and drink industries and in total manufacturing, 1988-93

4.8 Germany (former FRG): Gross value added per worker and gross hourly wages in the food and drink industries and in total manufacturing, 1988-93

4.9 Monthly average per capita net earnings in the Hungarian food, drink and tobacco industries, by branch, 1992-95

4.10 Monthly average earnings of manual and non-manual workers in the Hungarian food, drink and tobacco industries, by branch, 1995

4.11 Monthly earnings per worker in the Indian food-processing industry

4.12 Japan: Average monthly hours of work and earnings in the food-processing industries, by sex and size of establishment, 1992-96

4.13 Great Britain: Average weekly hours of work in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.14 Great Britain: Average hourly earnings in the food, drink and tobacco industries and in total manufacturing, 1988-95

4.15 Great Britain: Average annual earnings per head in the food, drink and tobacco industries, 1988-93

4.16 United States: Average weekly hours of work and earnings of production or non-supervisory workers in the food, beverages and tobacco industries by subsector, 1991-95

4.17 Belgium: Number of cases of occupational accidents and diseases reported and cost of compensation in the food and drink industries, 1990-93

4.18 France: Occupational accidents in selected sectors, 1993-94

4.19 Germany: Number of cases of occupational diseases reported in the food, drink and catering sectors, 1990-96

4.20 United Kingdom: Number of cases of injury to FDT and manufacturing workers, 1992-95

4.21 United States: Incidence rates of occupational injury and illness, by industry, 1985-94


List of recurring abbreviations

 

AFBTE

Association of Food, Beverage and Tobacco Employers

 

BCTWIU

Bakery, Confectionery and Tobacco Workers' International Union

 

BOD

Biochemical oxygen demand

 

BSE

Bovine spongiform encephalopathy

 

BST

Bovine somatotrophin

 

CAD

Computer-aided design

 

CAM

Computer-aided manufacture

 

CFC

Chlorofluorocarbon

 

CIM

Computer-integrated manufacturing

 

CIP

Cleaning-in-place

 

COD

Chemical oxygen demand

 

CRS

Continuous rotating shift

 

CRT

Cathode-ray tube

 

DITO

Dairy Industry Training Organization

 

DSD

Duales System Deutschland

 

ECR

Effective consumer response

 

EPOG

Electronic process operating guidelines

 

ERRA

European Recovery and Recycling Association

 

EWC

European Works Council

 

FD industries

Food and drink industries

 

FDA

Food and Drug Administration

 

FDC

Food, drink and catering

 

FDI

Foreign direct investment

 

FDT

Food, drink and tobacco

 

GDP

Gross domestic product

 

GM

Genetically modified

 

HACCP

Hazard Analysis and Critical Control Point

 

HPG

High performance group

 

ISIC

International Standard Industrial Classification

 

ISO

International Standard Organization

 

IUF

International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations

 

MRP

Manufacturing resource planning

 

NEDC

National Economic Development Council

 

NIC

National Industrial Classification

 

OECD

Organization of Economic Cooperation and Development

 

PCB

Polychlorinated biphenyl

 

PET

Polyethylene terphathalate

 

PLCs

Programmable logic controllers

 

QA

Quality assurance

 

QAT

Quality action team

 

QCC

Quality control circle

 

SIC

Standard Industrial Classification

 

TQM

Total quality management

 

UNEP

United Nations Environment Programme

 

VDU

Visual display unit

 


Exchange rates

The exchange rates for the following currencies against US$1 for the period 1980-95 are given here for ease of reference.


Country

Currency

1980

1985

1990

1995


Australia

A$

0.92

1.22

1.25

1.35

China

Yuan (RMB)

1.58

2.82

4.71

8.41

European Union

Ecu

-

1.4111

0.830

0.802

Germany

DM

1.76

3.10

1.70

1.51

Hungary

Forint (Ft.)

23.12

51.07

65.50

112

India

Rupee (Rs.)

7.85

12.20

16.80

36.262

Japan

Yen (Y)

240

248

141

97

New Zealand

NZ$

1.05

2.08

1.72

1.56

United Kingdom

£

0.449

0.855

0.517

0.630

1 1986 rate. 2 1997 rate.


1. Recent trends in the food and
drink industries

World population is projected to be 6.1 billion by the year 2000, of which approximately 80 per cent will be found in developing countries.(1) While millions of people in many developing countries, particularly those beset by disaster or war, are still undernourished, the number of such people is estimated to have declined from approximately 920 million in 1969-71 to about 840million in 1990-92.(2) Considering that estimated world population grew from 3.7 billion in 1970(3) to 5.4 billion in 1992,(4) the world has been successful in feeding an increasing number of people over the past few decades. The FD industries have contributed significantly to improving global food security over the years through better processing and preservation techniques, more reliable packaging materials and improved distribution systems.

Production

Volume

Owing mainly to improved agricultural technology, per capita food production in developing countries increased by 23 per cent between 1980 and 1993, though it declined by 3 per cent in industrialized countries in the same period. Global per capita production increased by 18 per cent(5)and livestock production and fishery catches grew. By way of example, world beef and veal production increased from 49.7 million tonnes in 1987 to 52.2 million tonnes in 1993. Poultry production climbed from 31.2 million tonnes to 40 million tonnes during the same period.(6)Despite some fluctuation, global nominal fishery catches rose from 100.7 million tonnes in 1989 to 112.9 million tonnes in 1995. The declining rate of growth for the catches in marine areas is increasingly being offset by catches in inland waters, which rose from 13.8 million tonnes in 1989 to 21 million tonnes in 1995.(7)

Table 1.1 presents index numbers for the volume of food production for 1985-95, with 1990 production constituting 100. The rate of increase for the entire period was relatively small in most OECD countries, with the exception of Ireland. This is largely due to the fact that the market in those countries was relatively mature by the mid-1980s. The stagnation and decline in Japanese production in recent years is probably a reflection of domestic food manufacturers being placed under increasing pressure from cheaper imported products as a result of increased trade liberalization.

Table 1.1. Index numbers for the industrial production of food products (ISIC 311), 1985-95 (1990 = 100)
 


Country/territory

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995


High-income non-OECD

Cyprus

80

83

89

93

98

100

98

104

110

117

121

Germany (former GDR)1

167

171

171

173

174

100

Hong Kong 2

66

70

76

86

89

100

104

109

112

113

113

Israel

79

90

101

101

99

100

101

104

113

119

Kuwait

116

115

114

117

121

100

84

71

Singapore

83

90

91

99

102

100

105

108

112

112

113

United Arab Emirates

72

70

94

93

105

100

102

104

High income OECD

Australia

89

91

96

97

98

100

103

111

119

Austria

83

85

85

88

92

100

106

107

108

112

113

Belgium

82

85

88

90

97

100

103

105

106

105

110

Canada

102

102

102

102

98

100

102

104

104

108

109

Denmark

93

97

95

97

97

100

109

107

107

Finland

93

95

97

99

100

100

99

100

103

106

109

France

90

89

92

95

96

100

102

104

105

106

Germany (former FRG)3

81

83

84

87

91

100

107

106

106

105

Iceland

93

95

95

97

96

100

82

Ireland

76

79

90

94

96

100

104

114

120

129

143

Italy

89

91

94

98

99

100

101

103

103

Japan

94

95

94

97

99

100

103

103

103

100

100

Luxembourg

92

92

91

90

96

100

100

97

101

96

Netherlands

85

90

90

93

97

100

102

105

106

103

105

New Zealand

85

87

81

100

107

100

111

115

Norway

103

102

103

101

102

100

104

105

106

116

118

Spain

88

87

94

97

95

100

103

99

100

104

102

Sweden

98

97

96

98

100

100

97

93

97

100

Switzerland

91

93

94

95

98

100

102

102

103

106

106

United Kingdom

93

93

96

99

98

100

100

101

102

103

104

United States

91

93

96

98

99

100

102

103

106

109

111

Low-income

Bangladesh

56

70

74

72

96

100

94

91

102

113

Benin

93

95

96

97

100

100

97

Bhutan

100

Burkina Faso

64

53

95

118

91

100

116

101

Burundi

76

86

87

97

92

100

96

101

101

Cambodia

77

79

89

93

96

100

102

107

Central African Republic

74

75

87

89

91

100

102

103

Chad

72

77

77

78

99

100

82

88

Egypt

113

129

109

106

127

100

101

103

124

132

Ethiopia and Eritrea

130

125

125

132

128

100

92

96

Gambia

81

81

108

66

101

100

Ghana

73

71

88

94

84

100

Guyana

185

187

168

128

126

100

123

187

187

195

192

Haiti

143

110

128

133

103

100

65

46

39

39

39

Honduras

61

59

60

74

77

100

125

133

147

India

75

79

82

89

89

100

105

106

99

Indonesia

56

61

66

87

86

100

108

113

152

201

Kenya

80

85

93

99

99

100

101

97

97

Lao People's Democratic Republic

94

98

102

106

95

100

107

117

Lesotho

97

97

97

100

100

100

104

100

Liberia

96

96

108

108

108

100

104

Madagascar

79

79

86

98

103

100

82

83

89

Malawi

74

79

80

78

94

100

92

98

100

92

96

Mali

106

97

72

85

83

100

87

105

93

122

Mauritania

64

83

81

87

92

100

95

95

Mozambique

96

89

85

81

93

100

96

77

Myanmar

116

120

113

94

96

100

93

130

Nepal

69

79

86

91

105

100

109

117

Nicaragua

100

96

95

96

102

100

103

104

Niger

65

79

86

83

103

100

100

103

Nigeria

122

88

99

89

97

100

106

132

Pakistan

102

90

107

111

124

100

114

116

134

131

139

Rwanda

119

102

107

130

100

100

100

130

Sierra Leone

88

88

88

88

97

100

103

Somalia

114

97

117

121

126

100

69

31

Sri Lanka

84

101

89

81

96

100

102

98

117

125

141

Sudan

85

80

90

91

90

100

106

116

Tanzania, United Republic of

116

103

100

114

123

100

120

111

95

Togo

69

72

92

95

98

100

Uganda

54

49

57

73

88

100

130

140

141

177

207

Yemen

96

99

99

100

100

100

101

103

Zaire

79

82

85

94

102

100

105

87

Zambia

82

80

83

90

86

100

102

127

Zimbabwe

79

88

91

90

92

100

102

104

85

90

99

Middle-income (lower)

Algeria

84

92

95

97

99

100

99

94

99

95

88

Angola

199

199

119

119

100

100

119

100

80

Belize

102

93

82

81

91

100

102

100

100

105

105

Bolivia

83

92

97

99

98

100

111

110

117

121

128

Bulgaria

102

105

104

107

110

100

72

Cameroon

86

85

101

103

106

100

98

90

Chile

89

97

93

97

104

100

101

119

123

137

143

Colombia

87

88

90

90

90

100

93

101

105

103

106

Congo

140

106

79

94

106

100

59

82

85

Costa Rica

80

85

91

94

96

100

Cuba

94

89

85

96

90

100

85

85

50

Czechoslovakia (former)

97

99

99

100

103

100

79

69

Côte d'Ivoire

88

103

105

97

107

100

106

138

167

144

111

Dominican Republic

111

113

128

132

118

100

99

104

Ecuador

86

88

93

92

95

100

109

109

108

El Salvador

90

91

93

96

98

100

106

Fiji

77

102

94

90

103

100

103

107

106

116

111

Guatemala

86

75

80

91

95

100

98

99

Iran, Islamic Republic of

112

98

96

89

88

100

110

125

Iraq

106

101

109

95

119

100

77

91

Jamaica

108

99

90

112

97

100

108

102

98

100

Jordan

120

83

86

99

95

100

84

137

123

114

Lebanon

83

84

80

75

78

100

125

124

Malaysia

68

74

79

82

95

100

96

102

112

119

125

Mauritius

104

114

111

102

91

100

98

103

91

80

94

Mongolia

99

102

104

106

109

100

109

Morocco

108

113

94

99

98

100

104

104

115

120

119

Namibia

70

76

87

88

93

100

109

102

Panama

98

96

103

90

96

100

105

111

116

125

136

Papua New Guinea

93

102

108

109

104

100

100

105

Paraguay

72

75

79

71

98

100

71

81

69

80

Peru

99

111

125

118

99

100

97

101

101

117

124

Philippines

65

64

70

83

92

100

114

123

128

147

158

Poland

149

155

158

163

145

100

97

107

124

Romania

102

107

114

114

114

100

83

69

59

67

69

Senegal

61

51

84

109

97

100