Germany’s BDSI confectionery body calls for immediate sector support, amid 400% energy price rises

Germany’s confectionery trade body, the BDSI has called for significant tax cuts for small and medium-sized businesses in the sector, amid major gas an electricity price rises in the country that are set to have a critical impact on industry, reports Neill Barston.

The call comes amid wider significant strain on the sector, affected by spiralling inflation costs due to a shortage of ingredients, as well as serious supply chain shortages linked to the ongoing war in Ukraine – with energy prices now effectively spiralling 400%.

Notably, the BDSI’s plea for cutting tax in the form of suspending the increase in CO² tax, as well as custom funding programs, comes as the German federal government set a gas levy for financial support for gas importers, which will be followed by a marked increase in gas prices by an  additional 2.419 cents per kilowatt hour.

As the confectionery group noted, this levy is yet to come to the already drastically increased gas and energy prices. The prices for annual contracts a year ago on the futures markets that were 15 to 30 euros per megawatt hour,  are now reaching between 60 and 200 euros- amounting to an increase of over 400% that have to be soaked up by the industry.

Dr Carsten Bernoth, General Manager of the Federal Association of Germans Sweets Industry e.V. (BDSI), warned that immediate action would be required to support the sector, given that natural gas is a critical part of many companies’ operations for baking, roasting and other heat processes in the confectionery industry.

“The gas prices for industrial customers are is already at a record level without the gas surcharge. With the levy comes an additional, not insignificant burden.

“Companies in no country in the EU pay as much as in Germany, and this has drastically increased costs for raw materials and logistics. The mostly
medium-sized companies in the German confectionery industry have experienced so far unprecedented stress and supply uncertainties. The companies
urgently need planning security and financial relief,” he said

He added that the Federal Government should urgently examine which measures that could be taken to mitigate gas and electricity price rises, adding that the existing subsidy programmes are too complicated and fail the requirements to meet the rapidly-evolving situation.




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