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03-03-22
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VskE: Growing bottlenecks threaten supply

The members of the Association of Self-Adhesive Label and Narrow Web Converter Manufacturers e.V. (VskE) report growing bottlenecks in the procurement of self-adhesive materials. n this context, the already extremely tense situation on the market for months has been exacerbated since the beginning of January by a strike at UPM's paper mills in Finland. "Where there used to be a 48-hour service, delivery times of several weeks are now the order of the day," explains Klemens Ehrlitzer, VskE managing director.

"If even price increases on a scale hitherto unusual for the industry - the VskE's quarterly material cost index documented an average cost increase of between 30 and 40 per cent for all product variants last year alone - take a back seat to the availability of materials, this highlights the real explosive nature of the current situation."

As labels are used in all sectors of the economy, the association is extremely concerned about the overall security of supply in many important areas, including in particular food, pharmaceuticals and medical technology, as well as all logistics. In order to draw attention to these far-reaching consequences, the VskE, together with the international federation FINAT and all national federations in Europe, has sent an urgent appeal to the parties involved in the strike in Finland. In it, both sides are equally called upon to take measures to end the strike as soon as possible in order to avert the disproportionately high damage to uninvolved third parties.

After all, it cannot be ruled out that the strike in the current situation may not only threaten the existence of companies in the label industry, but also the security of supply of essential goods for millions of citizens. This letter was sent simultaneously to the management of UPM and Paperiliitto, the Finnish paper industry trade union, on 8 February.

In addition to the two initiators VskE and FINAT, the following associations have also signed the letter:
- for France - Union Nationale des Fabricants D'Etiquettes Adhésives (UNFEA)
- for Italy - Gruppo Italiano Produttori Etichette Autoadesive (GIPEA)
- for Spain and Portugal - Asociación Ibérica de Fabricantes de Etiquetas en Continuo (AIFEC),
- for Great Britain - the Labels Sector of the British Printing Industries Federation (BPIF)
- for Turkey - Etiket Sanayicileri Dernegi (ESD)
- for Denmark - Dansk brancheforening for producenter af etiketter og leverandører til industrien (DLA).
- for Greece - Ελληνικός Σύνδεσμος Ετικετοποιών (ELSET)
- for Sweden - Grafiska Företagen

The associations represent an industry sector in Europe that comprises a total of around 3000 companies. With their almost 100,000 employees, they mainly produce self-adhesive labels. The current situation is so explosive because the strike not only affects individual types of paper, but in the case of self-adhesive labels, threatens a shortage for the entire product range, since ultimately, with the glassine and kraft papers that are particularly hard hit, the backing material that is indispensable for almost all self-adhesive labels is missing.

Unfortunately, there has been no reaction to the appeal so far that would indicate a solution to the conflict. On the contrary, according to a press release on 24 February, the strike, which has already been extended several times, has been extended again until 2 April if no agreement is reached in the meantime.

The VskE is observing this development with great concern, as the availability of self-adhesive materials throughout the supply chain is currently already so severely restricted that label printers are no longer able to produce many customer orders due to empty material stocks. At present it is impossible to predict when the situation will ease because even if the strike were to end in the short term, sufficient quantities of the required paper grades would have to find their way back into the partially interrupted supply chains.

Note: The original German edition of the press release on VskE's website is available here.