BDSI delivers renewed warning on deeply impacted German confectionery sector

Germany’s confectionery trade organisation, the BDSI has issued a fresh warning that ‘many small and medium sized businesses are struggling to survive’ amid a backdrop of inflated energy costs, broken supply chains and high raw ingredients costs, reports Neill Barston.

As the organisation noted, the country remains prominent globally for its traditional confectionery ranges – particularly Christmas chocolates and other bakery series, including advent calendars, but with the winter season fast approaching, concerns have been put forward for the hard-pressed industry.

Energy costs alone are expected to continue to soar, projected to be around 750% more than prices paid in 2021, placing industry under renewed further major strain – which as previously reported, led in part at least to the postponement of the next ISM and ProSweets to next April instead of its usual January position.

“Without quick help from the federal government, we run the risk that these companies will disappear forever from the German market together with their products,” warned Bastian Fassin, Chairman of the BDSI.

“It is therefore right and proper that the Federal Government should price brake wants to curb the exploding energy costs. But this one has to be from the companies take into account the amounts of energy they need, come quickly and be designed in an unbureaucratic manner.”

For 2023, companies expect additional costs for the purchased electricity of at least 750% compared to 2022. Added to this are the massive cost increases on the commodity markets, such as for sugar (+100%), glucose (+200%), butter (+95%), milk powder (+60%), wheat (+60%) or sunflower oil (+280%).

“The huge cost increases our manufacturers can no longer through savings or share in the compensate with sales prices,” Fassin continues. The BDSI therefore recently contacted Chancellor Scholz and the federal ministers Dr Robert Habeck and Christian Lindner turned and next to an energy price cap.

Immediate help required in these areas includes a need for Introduction of a uniform EU industrial electricity price, as well as the abolition of all EU tariffs on imports of food raw materials. Furthermore, companies ability to secure pre-financing and support in the event of financial difficulties remains another key factor.

“The companies are being deprived of liquidity and earnings as a result of the cost explosion are indispensable for job security and necessary investments. Therefore the politicians take all measures to relieve the markets for energy and agricultural commodities and actively reduce costs. We now hope for a practical design of the economic defencee shield,” Bastian Fassin concluded.

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