Europe's food and drink trade body, the CIAA, has called on the EU to ensure a sustainable and competitive supply of raw materials and to overhaul and simplify EU regulations.
It warned that research and development (R&D) and innovation among Europe's food and drink companies must be increased and food science courses boosted for the industry to remain competitive.
The CIAA was concerned that Europe's share of global food and drink export markets has been shrinking over the past 10 years. Its latest report, CIAA benchmarking report 2007 update, says the EU's share dropped from 24% in 1997 to 20% in 2005, losing out to countries such as Brazil and China.
From 2002 to 2005, the value of Europe's food and drink output grew by 1.8% a year, below that of most other developed countries, it adds.
The CIAA report also highlights Europe's poor R&D performance. EU food firms spent just 0.24% of turnover on R&D in 2004, it says, substantially below Japan (1.2%) and Norway (0.7%) and less than the US (0.3%).
Introducing the report, CIAA president Jean Martin said industry had responsibility for making business decisions, embracing the latest techniques and streamlining management. But he warned: "For the European food and drink industry to remain competitive, European policy makers need to create a stimulating business environment."
The CIAA also said one answer to Europe's poor food and drink R&D performance was to stimulate more food science teaching to provide staff able to develop new food products and processes.