Germany’s BDSI urges greater government support to reverse production volume losses

Germany’s BDSI confectionery sector trade body has called on the nation’s government to support the sector, as it continues to face high energy and ingredients costs that the organisation has expressed concerns over the impact on its international competitiveness, reports Neill Barston.

As the group noted, 2024 proved a challenging year for the industry, with more than 200 core companies engaged in the manufacturing side of the business experiencing drastic increases in the costs of raw materials, energy and personnel and a flood of new bureaucratic requirements “that are increasingly suffocating companies.”

Consequently, the BDSI said there had been a significant decline in production volumes in Germany, with economic conditions not anticipated to improve for the export sector in the short to medium term- especially in light of major costs of cocoa increasing, as well as key rises in the cost of sugar, which has 

According to the group’s estimates, total production of confectionery and snack items manufactured in Germany fell to 4.2 million tonnes (-2.7%) in 2024. However, in terms of value, there were some more encouraging signs, as production developed positively at around €17.4 billion (+5.3%).

The export business with confectionery and snack items, which is so important for the German confectionery industry, also fell slightly in the course of 2024, as it did in 2023. In total, an estimated 2.5 million tonnes of confectionery and snacks were exported. This represents a slight decrease of -0.6% compared to the previous year. Export sales rose by +16.7% to around €14.3 billion in 2024.

In view of the declining domestic market and the high concentration in the German food retail sector, the export of confectionery in particular is becoming increasingly important for the economic survival of companies and the preservation of the unique medium-sized structure. With a value share of over 60%, exports in particular contribute to value creation in companies.

As the organisation added, German manufacturers of confectionery and snacks have been under enormous economic pressure for years. High energy prices in Germany are increasingly affecting the international competitiveness of the industry – they have now become a decisive location factor.

“It is high time that the next federal government provided affordable energy and cleared the bureaucratic jungle. The ever-growing reporting requirements are overwhelming companies and taking away their breathing space. Even European regulations are implemented more complexly in Germany than in neighbouring countries.

“Bureaucracy must not be an end in itself – it must remain understandable and practical for companies. If the new federal government does not take swift countermeasures, there is a risk of a market shakeout to the detriment of small and medium-sized companies – and an increasing relocation of production steps to other EU countries,” explains Bastian Fassin, Chairman of the BDSI.

He added: “The development in exports clearly shows that the industry has lost a lot of competitiveness.”

 

 

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