Profits dip as German candy makers feel the heat
materials has led to a decline in the German sweet confectionery
and chocolate sectors.
After several years of the growth in the sector, production of sugar confectionery in Germany dropped in 2006. Output was down 1.2 per cent to 539,000 tonnes – leading to a fall in value of 2.2 per cent to €1.73 billion. And only growth in exports have prevented the chocolate market from stagnating according to a report from the Association of the German Confectionery Industry (BDSI). The value of chocolate product exports rose by 15.2 per cent to reach €1.44 billion last year while domestic sales dropped 2 to 3 per cent in volume. This strong foreign trade boosted production volume by 4.7 per cent to 900,00 billion tonnes although production value overall was slightly lower than the preceding year at €4.375 billion. The BDSI attributed the decrease in the domestic market to warm weather adversely affecting consumer demand while the costs of raw materials climbed signficantly. 2006 saw glucose prices rise by over 30 per cent as suppliers attempted to pass on the mounting costs of ethanol production while cocoa supply became erratic due to unsettled conditions in one of the world's largest cocoa bean region, the Ivory Coast. Confectioners expect to see these costs being passed onto consumers, especially with those products using a high quantity of glucose such as bonbons, licorice and fruit gums. And the market is due further instability in the future with the arrival of new European regulation governing health and nutrition claims. The BDSI warned: "The manufacturers of sugar confectionery now face sweeping changes. The new regulations will have dramatic effects on products in the coming years with regard to the use of health and nutrition-related claims."
