delivery bottlenecks
Toilet paper is becoming scarce again – hamster purchases are not the reason this time
The toilet paper manufacturers are in crisis
© Frank Hoermann/SVEN SIMON/ / Picture Alliance
At the beginning of the Corona crisis there was a crazy hype about toilet paper, today the industry is in crisis. The manufacturers are struggling with enormous price increases, there is a risk of empty shelves.
Anyone who is currently standing in front of the shelf with toilet paper in the supermarket could have a flashback to spring 2020. As in the first Corona wave, there are gaps in many places, and some toilet paper is sold out. Is it that time again? Will Omikron ensure the next wave of hamster purchases?
In fact, this time it’s not the consumers who are ensuring that the shelves are emptied with crazy stock purchases. Instead, the manufacturers themselves have problems producing the goods in the usual quantities and at the usual low prices. Because high raw material and energy prices have plunged the industry into a massive crisis. There are delivery bottlenecks and price disputes with the retail chains. Some manufacturers even fear for their existence, reports Lebensmittelzeitung.
One thing is clear: anyone who still remembers toilet paper manufacturers as “winners of the pandemic” has long since had to thoroughly revise this image. On the one hand, the hamster purchases two years ago did not mean a sustained boom because customers subsequently had to buy fewer supplies. On the other hand, the general economic conditions for manufacturers have deteriorated massively since then.
Raw materials are scarce and expensive
One of the main reasons: pulp, the key raw material for the production of sanitary paper, has been scarce and expensive for months. With the global economy picking up again, the demand for paper has generally increased sharply. In November, the Federal Statistical Office noted that the import price for cellulose had increased by 45.7 percent within a year and that for waste paper by 75 percent. The wholesale price for mixed recovered paper has even tripled within a year.
In addition, the energy-intensive paper industry is suffering massively from the exploding energy prices and the generally higher costs in logistics. And to make matters worse, workers in the paper and pulp mills of the Finnish supplier UPM also went on strike in January.
Price squabble with retail
Many manufacturers have already increased their prices in the past year, but that is apparently not enough. This is shown, for example, by the figures from market leader Essity, which produces Zewa toilet paper and Tempo handkerchiefs, among other things: Although the Swedish industry giant’s sales in the fourth quarter of 2021 increased by eleven percent compared to the previous year, profits fell by 34 percent. Price increases in all product categories and markets are therefore indispensable, announced Essity boss Magnus Groth. Because: “We do not expect any decline in the historically high costs for raw materials, energy and distribution in the near future.”
The problem is that the price-conscious retailers have little desire to pay even more for the toilet paper. The food newspaper reports that retailers had already accepted price increases of up to 20 percent by the end of the year. Now they are at odds with manufacturers across the industry about the conditions of further delivery. Rewe is currently missing items from the brand manufacturer Hakle throughout Germany. Zewa manufacturer Essity could not agree on a delivery with Edeka. And also at Lidl and Netto there are temporary gaps.
Without price increases, however, some toilet paper manufacturers cannot currently operate the business economically. According to the Lebensmittelzeitung, the output of the manufacturers in December and January was already significantly lower than planned. Insolvencies of smaller manufacturers or a consolidation of the market are becoming more and more likely.
Sources: food newspaper / essity / destiny