Commodities

German Confectionery Industry calls on government to help with gas and energy costs after 400% rise in prices

By Anthony Myers contact

- Last updated on GMT

A natural gas supply is crucial for production in the confectionery industry. Pic: Getty Images
A natural gas supply is crucial for production in the confectionery industry. Pic: Getty Images

Related tags: Gas

Relief for small and medium-sized businesses is urgently needed, said the Federal Association of the German Confectionery Industry (BDSI), after Germany’s federal government sets a gas levy to provide financial support for gas importers.

Gas prices in Germany will increase by an additional 2.419 cents per kilowatt hour from October. The BDSI said this surcharge comes on top of the already drastically increased gas and energy prices.

Running out of gas?

Natural gas is of great importance for production in the food industry. This also applies to confectionery. Gas is used for the thermal processes and to generate electricity in the plants. A substitution is not possible in the short term, even if the food manufacturers are working flat out on alternative solutions. Gas is currently indispensable for baking, roasting and other heat processes in the confectionery industry. Also, over 50% of companies in the German confectionery industry have fewer than 100 employees, another 27% have fewer than 250 and 15% up to 500.

While the prices for annual contracts on the futures markets were 15 to 30 euros per megawatt hour a year ago, they are now between 60 and 200 euros. These are price increases of over 400%, to which both the industry and consumers have to adjust, it said in a statement.

Dr Carsten Bernoth, General Manager of the Federal Association of the German Confectionery Industry (BDSI), said: "The gas prices for industrial customers are already at a record level without the gas surcharge.

“With the surcharge, there is an additional, not insignificant burden. In no other country in the EU do companies have to pay as much for electricity as they do in Germany.

Added to this are the drastically increased costs for raw materials and logistics, Bernoth said.

 “The predominantly medium-sized companies in the German confectionery industry have been experiencing unprecedented burdens and supply uncertainties. Companies now urgently need planning security and financial relief.”

The BDSI said it is calling for significant relief, especially for small and medium-sized companies.

These include tax cuts for companies, the suspension of the increase in the CO² tax, and tailor-made support programmes.

The existing subsidy programmes are complicated and do not reflect reality when it comes to the requirements, for example, if the cost increase due to the gas surcharge cannot be taken into account … they therefore offer no relief for the majority of companies​,” the BDSI said.

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