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Labels: "Shortage everywhere in historic dimensions"

25.11.2021 Klemens Ehrlitzer is managing director of the German Manufacturers’ Association for Self-Adhesive Labels and Narrow Web Converting (VskE).

Klemens Ehrlitzer.
© Photo: VskE
Klemens Ehrlitzer.

Ehrlitzer spoke to our sister magazine packREPORT about the Corona year 2021, the crisis of 2020, the overall situation of label printers, cost increases and prices.

"Without packaging and labels we could call it a day!"

"At the beginning of the Corona pandemic in 2020, many of our member companies asked themselves: are we allowed to continue producing at all? Then, as is well known, several industry associations came together and wrote to the federal ministries saying: 'Without packaging and without labels, we can all call it a day and close down the supermarkets, etc.' The VskE was also part of this appeal."

"The whole logistics system doesn't work without information labels. The whole mail order business doesn't work without labels. Or just think of medical devices! When this was recognised by the political decision-makers, things actually went relatively well. I don't know of any label printing company that had to close down because of Corona. 2021 was a good year, considering the circumstances. Overall, the global label industry also picked up."

"After the crisis of 2020, the year 2021 was a comparatively good year for most label printers. The advantage is often that most companies have a very broad portfolio that spans different market segments. So if things didn't go well in automotive or office products, they could make up for it with food or pharma, for example. Overall, most companies were satisfied with the order situation."

Cost increases and availability crisis

"A huge problem continues to be the high cost increases. As the entire industry has been affected by this since the beginning of 2021, we no longer have to explain where the causes lie. Partly even more dramatic than the cost increases for raw materials is the availability. It is often difficult to obtain material with acceptable delivery times at all. This goes across all material fractions and concerns PE and PP labels as well as paper labels. But also basic chemicals, e.g. for printing inks. One could say: shortages everywhere in historic dimensions. Most label printers say that they were able to raise their prices as a result. But whether this is enough to compensate completely is rather unlikely. Some products became more than seven per cent more expensive per quarter. That is quite extreme."

"This situation will not ease completely at the beginning of 2022, even though the very big peaks may have passed. It may ease in mid-2022 when new production capacity comes into play in some parts of the supply chain that should improve availability. And that should also have an impact on prices."