BDSI trade body seeks national and EU support for confectionery companies facing record energy price hikes
The German BDSI confectionery trade body has appealed for immediate national and EU support for manufacturers and businesses across the sector in light of crippling energy, ingredients and packaging costs threatening the viability of businesses, reports Neill Barston.
As the organisation noted, market conditions in recent months, the price of gas has spiralled by 400% in the wake of the ongoing war in Ukraine, with unprecedented hikes agricultural commodities and logistics within the industry.
According to the BDSI, this is having a major impact right across the sector, with companies now facing liquidity problems, with predominantly medium-sized manufacturers in the confectionery field hit hard to the point of companies potentially going out of business.
Placed in context, the organisation said that compared to August 2021, the exchange prices for electricity and gas have increased tenfold. The procurement prices for companies have reportedly more than doubled for vegetable oils and fats, for butter, sugar or glucose.
Furthermore, it said that other domestic raw materials have also risen sharply in their prices, including whole milk powder (up 59%) or Wheat (up 36%). There are also availability problems, which the upcoming make production planning difficult.
“The companies are losing liquidity and earnings due to the cost explosion withdrawn, which are indispensable for job security and necessary investments.
Politicians must therefore take all measures to strengthen the markets for energy and to relieve the burden on agricultural raw materials and to actively reduce costs,” demands Bastian Fassin, Chairman of the Federal Association of the German Confectionery Industry e.V. (BDSI).
“We very much welcome the fact that the Federal Government is also addressing the issue of a third relief package energy costs for companies. From the point of view of the industry, it is now necessary that the announced measures actually contribute to relief lead companies, not only in the energy-intensive.
“The federal government must not refer only to Brussels. A first step at national level can be through a significant reduction in the state price components for electricity and gas and the Price coupling will be lifted, as well as at European level by a Reduction of import duties on raw materials entering the European Union shortage is foreseeable,” Fassin continues.
In addition, the BDSI noted that further price increases are also expected in the areas of logistics and packaging to support companies. The price increases for truck transport, cell-based raw materials and plastic raw materials are in the double-digit range. The situation in the factories is dramatic and there is fairness throughout the supply chain urgently required.