Updated on Wednesday, October 20, 2021 – 13:06
The rising cost of electricity, transport and raw materials
Ignacio Gonzlez, president of AecocEL MUNDO
The mass consumer sector has today warned of the risk posed the triple increase in costs (of electricity, transport and raw materials) for the recovery of consumption, at a time when a large part of the savings contained during the pandemic has not yet emerged and in which “inflation is going to continue.”
“They are not increases in the short term, but rather in the medium term. At the moment companies are not picking up part of this increase, they are absorbing it, but inflation is already surging and will be the same or even worse“, pointed out Ignacio Gonzlez, president of the Association of Companies and Manufacturers of Mass Consumption (Aecoc), which has inaugurated this Tuesday in Barcelona the 36th edition of its congress of mass consumption.
All these problems added to those derived from the pandemic “extraordinarily complicate the situation,” he pointed out. Is about “the explosion of energy and transport costs”, but also the availability of these, as well as the inflation of raw materials in the global market, which has been quantified at 22.4%, especially wheat, corn, barley and soybeans.
“These increases are already impacting the September CPI,” he said. “Although when companies have cost increases they absorb everything they can, so as not to impact the consumer, we are doomed to have inflation“, has pointed out.
Added to the rise in costs for these companies in the sector are supply problems due to the crisis in the supply chain, caused above all by the stoppage in the industry derived from the pandemic, a rapid recovery that has made it difficult to adapt in time and geopolitical effects
The cost of maritime transport has risen 328%, according to Gonzlez, although the problem “is no longer the price, but the availability.” “This situation is a huge challenge for a competitive sector that has little margin. There is a solution in the short term, which is for savings to emerge, but for that you have to build trust,” insists the president of Aecoc.
Facing the Christmas campaign, he is “moderately optimistic”, because the summer “has been relatively good and so is October” and at the doors of Black Friday and the Christmas season “the desire to go out will arrive before the possible economic effects” that could reduce consumption.
Gonzlez does not believe that there will be shortage problems derived from this crisis in the supply chain in the sector, although “it will depend on the product category, but we do not see tensions that could lead to a shortage, just as we do not see that the price of electricity can lead to stoppages in our industry “.
Finally, Gonzlez has stressed the importance of the mass consumption sector as an “engine for recovery”, since it carries 20% of GDP, and has regretted the increase in regulatory pressure on the sector, with the war on plastic in the center, the lack of normative unity (there are 12,000 new laws a year in Spain) and has warned of the risk of trying to change consumption habits through taxation.
“The scenario is complex and we need prudence in accompanying measures, labor costs must be contained and uncertainty cleared up, “he said.
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