December 4, 2021
Transportation Collapse Leaves Spirits Manufacturers Out Of Stock

Transportation Collapse Leaves Spirits Manufacturers Out Of Stock

Manufacturers of spirits -with more than 15 degrees of alcohol- already face “serious” problems in Spain to supply their customers with some of their references due to the collapse of the international transport system, which also puts the sector’s exports at risk .

This is warned in an interview with Efe by the executive director of the Espirituosos de EspaƱa (FEBE) employer, Bosco Torremocha, who categorically discards that this phenomenon is connected with an increase in alcohol consumption due to the relaxation of limitations after the pandemic .

“We do not expect to recover the sales levels of 2019 until the end of next year or the beginning of 2023 “, Torremocha points out.

“The reading that there is a brutal increase in consumption is false. It is not taking place, what there is is a shortage of markets and that affects certain categories and certain brands, because this crisis in international trade does not touch 100 % of the sector, “he details.

The data available to the employers point to a closing of 2021 better than that of 2020 – when its income fell by around 30% -, but still between 12 and 15% below its turnover figures for 2019 ; Last year, 141 million liters were consumed, when the usual was to exceed 200.

The director of FEBE considers any comparison with 2020 inappropriate , a year in which the hotel industry closed its doors for months, in which nightlife practically disappeared and in which tourism was deeply damaged.

In addition, it warns that if the situation continues, some companies will even see their survival compromised : “A stock break is a drama for a company, although if it lasts two weeks it is less tragic than if it lasts three months. It lengthens and you cannot fulfill orders, you do not have invoicing and therefore you have no liquidity … “.

Asked about his estimates for Christmas, he declined to make any kind of forecast: “I cannot think about the campaign for the end of the year, as a representative of the sector I am focused right now on tomorrow, on how to solve this crisis how much before, “he insists.

The problem also affects the exports of Spanish spirits manufacturers, who sell around 40% of their production abroad .

Customs jam, Brexit and rise in raw materials
Torremocha speaks of a “cocktail” in which the costs of maritime transport are mixed (the so-called freight rates, which have skyrocketed), the rise in price of raw materials (not only ingredients, but also glass, cardboard or cork) and the traffic jam in Customs (partly due to Brexit) as the cause of this global crisis.

“The question is not only the increase in costs, but even when paying, you are not sure when they are going to serve it to you, ” he emphasizes.

In this sense, remember that the rise in energy prices also penalizes manufacturers , since they mostly use natural gas in the distillation process.

Torremocha recalls that the situation of many companies – in Spain there are about 3,800 spirits production centers – was already delicate due to the impact of the pandemic on their accounts, but also due to the collateral effects left by the 2008 financial crisis .

“Consumption fell a lot during that crisis and we were still trying to recover. In the five years from 2014 to 2019 we were at it, but without reaching previous sales levels, possibly due to a change in consumer habits,” he says.

A sector of nightlife “especially punished” and the aging of the population are two of the factors cited by the director of FEBE, who demands more attention from the administrations: “Just as they are trying to address the energy crisis, we ask that they attend to the serious problems we have in international trade and Customs “.

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