| Various
factors are responsible for this problem. Consolidation
has seen five companies merge into two.The oil crisis
has made the production process more expensive, and
strikes and accidents have affected the two biggest
companies in France, St Gobain and Owens Illinois, the
American company which recently bought BSN Glasspack.
There is also a positive reason for the shortfall: 'the
rise in exports across Europe, and France in particular,
as the wine sector rebounds from its slump'.
Co-operatives and branded wine owners are affected
most, as they need large volumes and often change suppliers
every year, depending on cost.
Higher quality producers, and smaller producers, tend
to have long-standing relationships with single suppliers
and so are getting bottles, 'but even those have to
be ordered well in advance and are more expensive than
in previous years. Yet another factor is the fact that
the glass industry is slow to react to spikes in demand,
as the production process is slow and plants can only
work to a certain capacity.
Recent demand for clear glass for rosé wines,
for example, has not been easily fulfilled. Factories
are already working at full capacity and demand has
exceeded growth. Prices for glass have risen between
7% and 10% over the past two years – and as most
branded wines export to highly specific price points,
that means any rises have to be absorbed by them, not
passed down the supply chain.
Full Report: http://www.decanter.com
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