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31-03-22
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FINAT appeals for a European approach to the current supply chain distortions

Following a news article in a Belgian newspaper on supply chain problems in the agrofood sector that was brought to our attention, FINAT has sent a letter to the Belgian cabinet taskforce on Agrofood Supply (consisting of the Belgian Ministers for Economic Affairs and for Agriculture as well as the State Secretary for Consumer Protection) to appeal for a European approach to the current supply chain distortions and in particular the paper shortage. Below we publish this as an open letter to policy makers.

Dear Excellencies,

FINAT is the European association for the label manufacturing industry, with 600 members all around Europe and national affiliated associations in 15 European countries. Our President Philippe Voet (Etivoet, Deinze, B) forwarded me the article in HLN which contained a reference to an earlier article about the agrofood taskforce to address the supply chain disruptions in Belgium.

In the article, also a statement was made about the current situation in the label industry. We have been drawing attention to the supply chain issues facing our industry since last summer, as a result of which not only consumables suppliers (inks, adhesives, chemicals, substrates) but also technology providers (chips, components) have been faced with shortages, increasing lead times and price increases.

But since January, this situation has been aggravated by a continued strike in Finland at UPM Paper Mills, the largest supplier of backing papers for labels. The strike is now set to continue till mid-April, but at the moment there is no end in sight as the parties concerned seem to have dug their heels in the melting snow. Our repeated appeals to the parties to take into consideration the downstream impact around Europe of the resulting paper shortages (also commercial print is suffering) have remained unanswered. This week, at the online Shareholder meeting of UPM, not even a single reference was made to the impact of the strike beyond the immediate parties concerned (the leadership of UPM, the paper workers union Paperiliitto and the shareholders).

For your information, see the following messages we have posted the past few months:

As a result of these disruptions, the world’s leading trade exhibition for our industry, Labelexpo Europe that was to be held in Brussels at the end of April (10 halls in Brussels Expo, more than 600 exhibitors, almost 40 thousand visitors) had to be cancelled, as equipment manufacturers cannot get the parts to complete their equipment, there are no label materials available to make demo’s, and finally, many label companies are forced to prioritise capacity issues at home as they cannot get materials to print, in spite of booming demand since the economic recovery in 2021.

Already, even if this strike would end now, lead times have extended till beyond the summer given the current backlog (and it takes already a couple of weeks to start up a paper mill). We anticipate that in Q2 we will see severe disruptions in downstream industries like food and pharma. If products going into the stores or home deliveries cannot be labeled, this will have dramatic impact on households, at the time when a humanitarian disaster is unfolding in Europe due to the war in Ukraine.

It would be good if your taskforce could take into consideration these effects, and through your counterparts in other countries, address this topic at the highest political level in Europe.

This strike is no longer a Finnish labour dispute. Your supply chain problem is no longer a national issue. These issues have a pan-European dimension that demands a European answer.

I look forward to your reply.

Best regards,

Jules Lejeune
Managing Director FINAT

To read the translated article from the Belgian magazine, click here.