Confectionery Industry is sounding the alarm

Manufacturers of confectionery and snack foods are increasingly short of key packaging materials.

The corona pandemic is having an impact on many sectors. The German confectionery industry is seeing dramatic developments in important types of packaging such as cardboard, paper as well as paperboard. Here, in addition to serious cost increases, supply bottlenecks and shortages have occurred, the association reports. The main reason for this is the increasing international demand, which is leading to a cost explosion and a shortage of many raw materials for these packaging materials. Raw materials for plastic packaging are also currently experiencing tighter supply bottlenecks – not only due to Corona. Imports of raw materials to Europe are failing to materialize because they are being diverted to other continents, and weather-related plant outages and force majeure declarations by raw material suppliers in Europe are further complicating the situation. Prices have recently risen at the same time in several categories at great speed.

“We are watching the current developments toward a lack of supply security for much-needed packaging materials with great concern. It must be possible for food products, including confectionery, snacks, or ice cream, to be packaged safely. Companies in the industry are making every effort and sparing no expense or effort to guard against supply bottlenecks and production stoppages at packaging suppliers,” explains Dr. Carsten Bernoth, Chief Executive Officer at the German Confectionery Industry Association. (BDSI).

Only recently, the Industrievereinigung Kunststoffverpackungen (Industrial Association for Plastic Packaging) reported that 84 percent of the members participating in a snap survey conducted by the association reported a poor to very poor supply situation. According to the survey, eight out of ten plastic packaging manufacturers had to cut back production due to a shortage of raw materials. The situation is exacerbated by the fact that two out of three plastic packaging manufacturers are affected by one or more force majeure cases, he said. While some suppliers detailed the reasons for a shortfall in output, others considered the simple reference to “unforeseeable circumstances” sufficient to explain force majeure, according to the Industrievereinigung Kunststoffverpackungen.

The Association of the Corrugated Board Industry (Verband der Wellpappen-Industrie e.V./VDW) also warns of an ever faster spiraling of costs. The BDSI calls on all partners in the packaging materials supply chain to resolve this difficult situation as quickly as possible so as not to jeopardize supplies – especially for food.