Germany’s BDSI reveals major sales drop for over half of national companies
The major ISM German sweets event, in Cologne, has attracted a strong national contingent, yet the sector remains under pressure. Pic: ISM
Germany’s BDSI confectionery organisation has raised concerns that the nation’s industry is continuing to face ‘enormous challenges’ with 52% of sector companies in the country facing a cut in orders in the first quarter of this year, reports Neill Barston.
The body, which represents hundreds of manufactures across categories, highlighted the fact that steep price rises for agricultural raw materials such as cocoa and hazelnuts had been a factor in the concerning situation, as had additional bureaucratic requirements handed down from politicians.
In its latest survey, the organisation said that in addition to 52% of companies in the German confectionery industry reporting first quarter sales declines, earnings also deteriorated in 50% of companies. Sales of their products have also decreased by a total of 45% further compounding the sector’s woes.
As the study revealed, the biggest cost drivers from a company perspective are increased costs for raw materials (88%), followed by personnel costs (81%), energy costs (55%) and logistics costs (45%). Given the current challenges, a total of 68% of firms see their company’s international competitiveness at risk. Some 82% see the attractiveness of Germany as a location weakened in the long term.
Moreover, the BDSI study found that German businesses are also Companies are especially concerned by bureaucratic requirements of the Supply Chain Act (96%), including extensive reporting obligations according to the EU sustainability reporting CSRD (92%). In addition, there have also been fears over different labelling regulations in the EU internal market (86%), the plastics discussion, in particular the change in packaging ( 86%), and the requirements of the EU Deforestation Regulation (86%), known as EUDR, which is set to come into play at the end of this year, despite notable pushback from many EU member states.
Bastian Fassin, Chairman of the BDSI commented: “We urgently need a turnaround in politics, both in Brussels and in Berlin. The economy is slowly but surely suffocating with new bureaucratic requirements. It’s not just medium-sized companies that are wondering how they can get under control of the regulatory rage.
“If jobs, investments and added value in Germany are to be secured in the long term, politics must change as quickly as possible.”
Furthermore, the association concluded that parallel rather than coherent reporting obligations in the areas of due diligence and packaging, as well as the multiple examination of already verified data in the EU deforestation regulation, stood out as prime examples of unnecessary regulatory burdens in the eyes of many in industry.