Supply Chain

Raw Material Availability 'Biggest Challenge' For Manufacturers: BVE

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Procuring quality raw materials in sufficient quantities is getting increasingly difficult for many companies due to the current geopolitical and ecological crises as well as the pandemic, the Federation of German Food and Drink Industries (BVE) has said.

A new study by AFC Risk & Crisis Consult (AFC) in cooperation with the BVE examined the challenges facing food manufacturers and how companies are attempting to solve these challenges in supply chains that have become complex and unreliable in recent times.

The study included 412 industry employees responsible for risk and crisis management.

Risks along the supply chain have been steadily increasing in recent years, the study noted.

Christoph Minhoff, CEO of the BVE explained, "The food industry is experiencing the biggest crisis in 70 years. Harvest failures, supply bottlenecks due to COVID-19, and the effects of the Ukraine war are presenting companies with numerous problems. It is therefore hardly surprising that many companies see the availability of raw materials as the greatest challenge in the future.

"In view of global risks, regional procurement only partially solves the problem. We must do everything in our power to ensure that international supply chains are made crisis-proof. The food industry shows day after day that it is securing the supply of high-quality food in Germany despite these exceptional situations. Not least because of the pandemic, the food industry is crisis-tested!"

German Supply Chain Due Diligence Act

The BVE has called on the government to ensure the availability of affordable energy, introduce simplified and more expedient subsidies for the food supply chain, keep agricultural commodity markets open, and implement the overdue reduction of bureaucracy and tax relief for companies.

"Otherwise, despite all their resilience to the crisis, companies will slowly but surely reach their breaking point," Minhoff said.

Following on from this period of crisis-hit supply chains, the German Supply Chain Due Diligence Act is set to be introduced in 2023.

This new act would require companies to comply with and document social and environmental due diligence along all their supply chains.

Around 65% of German companies have been preparing for the new act, or have initiated measures, with 22% feeling well-prepared.

However, not all of the companies surveyed by BVE fall within the scope of the LkSG, so not all have concrete action plans in place, the study noted.

© 2022 European Supermarket Magazine – your source for the latest Retail news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.

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