German confectionery companies face collapse if regulations not lifted

By Anthony Myers

- Last updated on GMT

German confectionery production could grind to a halt as it faces unprecedented supply chain and energy issues.  Photo: Gerhard Schubert GmbH
German confectionery production could grind to a halt as it faces unprecedented supply chain and energy issues. Photo: Gerhard Schubert GmbH

Related tags BDSI

The manufacturing side of the German confectionery industry is facing its worse crisis in 70 years and could grind to a halt as it struggles with the aftermath of the coronavirus pandemic and an impending gas shortage caused by the Russian invasion of Ukraine.

With, energy, agricultural raw materials, packaging, and transport prices rising sharply, the Federal Association of the German Confectionery Industry (BDSI) says the Ukraine war is now drastically exacerbating the situation, to an extent that it could lead to production – including food – coming to a standstill.

Gas is the most important energy source for most companies in the German confectionery industry. Russia supplies 40% of Europe's gas needs and is Germany's main supplier, delivering Europe's largest economy with just under a third of its gas. Berlin has so far resisted calls to impose an embargo on energy imports from the country.

Supply chains

But the BDSI also warns of other challenges: the market for important raw materials is running low and long-standing supply chains no longer function.

In particular, it says, manufacturers are feeling the effects of significant price hikes and increasing delivery difficulties when purchasing important agricultural raw materials such as wheat, sunflower oil, sunflower lecithin and nuts.

The costs of milk powder, sugar, eggs and palm oil have also increased significantly recently – and due to price increases for fertilizers and feedstuffs, other raw materials are also becoming more expensive across the board.

"Together with politicians and the food trade, we must ensure that supermarket shelves do not remain empty. This risk also exists for many popular confectionery products. Politicians must now examine all measures that help food manufacturers to continue producing​," said Bastian Fassin, Chairman of the BDSI.

He is calling for German manufacturers of sweets and snacks to receive temporary exemptions from the legal obligation to declare their products “as long as individual ingredients are no longer available on the market.

“In order to continue to ensure supply in retail, alternative ingredients must be used. However, the reprint of the packaging required because of the recipe change is currently failing due to the packaging material being unavailable or only available with a delay​.”

Fassin said the industry wants to ensure there is still enough food available, even if it now contains rapeseed oil instead of sunflower oil, without the ingredient being explicitly stated on the packaging.

The German Federal Ministry of Food and Agriculture encourages companies and the supervisory authorities to use the leeway the existing legal framework offers for changes in labelling, if individual ingredients are no longer available on the market.

This means changes can still be made to the label after it has been printed and before the food is handed over to the end consumer.

This is a step in the right direction, but it has to work in practice. During the corona crisis, we saw a big mess of different regulations in the EU. This must not be repeated here​,” said Fassin. "Here, the companies in the German confectionery industry urgently need help from politicians, not only in Germany but also in Europe, because German confectionery is often not only produced for the German market, but for the European domestic market​."

He also made the point that Germany’s Federal Office for Civil Protection and Disaster Assistance recommends stocking up on long-life and high-energy products in its guide to emergency preparedness in such situations, explicitly listing chocolate, hard biscuits, cocoa powder and pretzel sticks as essential food items.

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