Allegrini 2018

Wine and spirits between energy and glass, Federvini: “the situation is tense”

President Micaela Pallini: “in addition to costs, we can’t find bottles: the difficulty now is sourcing glass. Many businesses are down”
Micaela Pallini, at the head of Federvini

Soaring energy prices have created an unsustainable situation for Italian wine and spirits businesses. In addition to energy bills that have in many cases quadrupled, companies in the sector must cope with the rising cost of all raw materials and the shortage of a key element: glass for bottles. Against this backdrop, the autumn is shaping up to be dramatic, exacerbated by the lack of interlocutors in politics, between a government in provisional exercise and parties engaged in the electoral challenge. “At a time of emergency and in the midst of the election campaign, companies feel increasingly lonely. We don’t know who to talk to”, Micaela Pallini, president of Federvini, the federation of producers of wines, spirits and vinegars, tells Adnkronos. For companies in the sector, she explains, “the situation is very tense”.
The difficulties at the beginning of the year, amid commodity shortages and rising costs, have been exacerbated by the war in Ukraine. The flare-up in energy prices is affecting the entire supply chain, from logistics to production to refrigeration. Raw materials such as alcohol and sugar have seen hikes of up to 40 percent. But the real problem is glass, as pointed out to WineNews by many producers in recent days, and also by the president of Unione Italiana Vini (UIV), Lamberto Frescobaldi.
“For us, it’s critical”, says Micaela Pallini, “we’ve had increases in spurts from producers, and in September we expect increases in the order of 25%, to reach a 50% increase in the price of bottles”. But in addition to prices, there is a serious shortage of product. “We can’t find the bottles, the difficulty now is to source the glass”. At the European level, the Federvini president points out, “some production sites have disappeared; in Ukraine there were some very important glassworks that have stopped. The lack of production capacity combined with rising costs and growing demand for wines and spirits has created a spiral from which we cannot get out. Alternative sources to glass cannot be found”.
And, in Italy, the situation is even more dramatic for wine and spirits producers, where glassworks are suffering more than their foreign competitors from the energy surge. “It is a very difficult time and we are all very worried. In September many of us have great difficulty in planning production and orders”, which are also there. The more solid companies, continues Federvini President Micaela Pallini, “maybe they can think for a period to absorb some of the costs, but all of us are getting ready to go through a second price increase down the supply chain. We cannot do otherwise, but it will have an impact on domestic consumption and exports”. All this in the midst of the election campaign and pending the formation of the new government.
“We are really concerned. We are facing a nebulous political situation, and we don’t even know who to deal with for answers”. Wine, spirits and vinegar companies are asking for “clearer perspectives. We need to understand whether at the energy level we can get support for companies and families, despite public accounts that are not in good order. For example, the benefits of the Draghi government on fuel excise taxes we have seen”, Pallini concludes.

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