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3/1/2023
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Glass Crisis: Manufacturers Complain of Supply Bottlenecks
Bottles and jars are currently in short supply. The situation on the glass market is tense. Across all sectors, manufacturers are complaining of supply bottlenecks, price increases and contract adjustments.
Since the Russian war of aggression on Ukraine more than a year ago, the supply of container glass in Germany and Europe has changed. In addition, high energy costs are having an impact on glass prices. The price stability we have been accustomed to over decades has been thrown out of balance, and concerns about bottlenecks for bottles and jars are growing. "We are still hoping for the market to calm down," a spokesman for dairy group DMK told Lebensmittelzeitung. For the first quarter of 2023, however, this has not yet materialized, he said.
The cost explosion for container glass is hitting a wide variety of companies: Manufacturers of jams, beverages such as sparkling wine, beer or mineral water, baby food or cosmetics. Price increases of up to 50 percent are the order of the day despite ongoing contracts. "Existing contracts are simply terminated," the head of a family-owned company tells Lebensmittelzeitung. "We are practically powerless in that regard." Despite ongoing contracts, additional demands of up to 40 percent have been made, confirms a sales manager. At the same time, there is virtually no willingness to transparently agree on corresponding indexes for inflation. "This is absolute price dictation according to the motto eat or die." There are downright power tests, it is said in the industry, with glass suppliers blatantly threatening to stop deliveries if the demanded price increases are not accepted.
According to Lebensmittelzeitung, the spirits manufacturer Berentzen has not yet received any contract cancellations. "However, we know that the glassworks will have to stop deliveries if price increases are not accepted," says Berentzen CEO Oliver Schwegmann. So far, he says, there have been no delivery failures, "but it does happen that a certain bottle shape or color is not delivered on the originally planned date."
The situation at the Rotkäppchen-Mumm sparkling wine cellar is similarly tense. Co-managing director Frank Albers explained to the Lebensmittelzeitung that Rotkäppchen-Mumm had been hit "fast and hard" by the massive rise in costs, especially for energy-intensive glass. A bottle of sparkling wine costs twice as much today as it will in 2019.
And that's not going to change anytime soon. In January, the price level at glass manufacturer Wiegand was around 50 percent higher than in the same month last year, says Nikolaus Wiegand, managing director of Wiegand-Glas, in an interview with Lebensmittelzeitung. And, "Supply is still tight and will remain so." Wiegand-Glas produces around three billion glass containers, mainly bottles for the beverage industry.
"From our point of view, the situation on the glass market has eased only slightly," says Holger Eichele, general manager of the German Brewers Association. It is true, he says, that the availability of new glass is currently better than in the previous year. "But those who want to buy returnable glass bottles at short notice without an existing contract often come up empty." Due to the high prices, more and more breweries are being forced to cut back on their investments in new glass, Eichele said. This increases the risk that the seasonal shortage of empties, which occurs every summer, could be even more drastic this year, he said.
There is more freedom of movement for returnable glass. Members of the Gemema reusable pool, which includes the likes of Radeberger, Bitburger, Krombacher and Warsteiner, suspended the annual quota requirement of 6 percent new glass about a year ago. "No pool member should be forced to drive prices via a quota," says Gemema managing director Hans Baxmeier. "The quota is still suspended." Basically, Baxmeier sees the standardized pool bottles, which can be ordered from various glassworks, as "a better protection against bottlenecks and a relief for the market" than individual bottles.
The cost explosion for container glass is hitting a wide variety of companies: Manufacturers of jams, beverages such as sparkling wine, beer or mineral water, baby food or cosmetics. Price increases of up to 50 percent are the order of the day despite ongoing contracts. "Existing contracts are simply terminated," the head of a family-owned company tells Lebensmittelzeitung. "We are practically powerless in that regard." Despite ongoing contracts, additional demands of up to 40 percent have been made, confirms a sales manager. At the same time, there is virtually no willingness to transparently agree on corresponding indexes for inflation. "This is absolute price dictation according to the motto eat or die." There are downright power tests, it is said in the industry, with glass suppliers blatantly threatening to stop deliveries if the demanded price increases are not accepted.
According to Lebensmittelzeitung, the spirits manufacturer Berentzen has not yet received any contract cancellations. "However, we know that the glassworks will have to stop deliveries if price increases are not accepted," says Berentzen CEO Oliver Schwegmann. So far, he says, there have been no delivery failures, "but it does happen that a certain bottle shape or color is not delivered on the originally planned date."
The situation at the Rotkäppchen-Mumm sparkling wine cellar is similarly tense. Co-managing director Frank Albers explained to the Lebensmittelzeitung that Rotkäppchen-Mumm had been hit "fast and hard" by the massive rise in costs, especially for energy-intensive glass. A bottle of sparkling wine costs twice as much today as it will in 2019.
And that's not going to change anytime soon. In January, the price level at glass manufacturer Wiegand was around 50 percent higher than in the same month last year, says Nikolaus Wiegand, managing director of Wiegand-Glas, in an interview with Lebensmittelzeitung. And, "Supply is still tight and will remain so." Wiegand-Glas produces around three billion glass containers, mainly bottles for the beverage industry.
"From our point of view, the situation on the glass market has eased only slightly," says Holger Eichele, general manager of the German Brewers Association. It is true, he says, that the availability of new glass is currently better than in the previous year. "But those who want to buy returnable glass bottles at short notice without an existing contract often come up empty." Due to the high prices, more and more breweries are being forced to cut back on their investments in new glass, Eichele said. This increases the risk that the seasonal shortage of empties, which occurs every summer, could be even more drastic this year, he said.
There is more freedom of movement for returnable glass. Members of the Gemema reusable pool, which includes the likes of Radeberger, Bitburger, Krombacher and Warsteiner, suspended the annual quota requirement of 6 percent new glass about a year ago. "No pool member should be forced to drive prices via a quota," says Gemema managing director Hans Baxmeier. "The quota is still suspended." Basically, Baxmeier sees the standardized pool bottles, which can be ordered from various glassworks, as "a better protection against bottlenecks and a relief for the market" than individual bottles.
