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European bodies speak out over materials price threat to converters

Tubes associations Etma has voiced concern over price rises

Two more European packaging associations have gone public over fears that raw materials pricing is damaging the converting sector, with one saying that buyers were "losing patience" with the situation.

The European Tube Manufacturers Association (Etma) and German plastic packaging federation IK have both warned that the current high raw materials prices are threatening the businesses of converters despite an otherwise buoyant business climate.

IK said that its members were angry about the "disproportionately high cost of raw materials as well as the shortage of certain primary materials". It added: "The clients of plastic packaging producers have lost their patience with the current situation."

IK and Etma's statements follow a similar message from European label manufacturers' association Finat last month, which voiced concerns over its members facing "all-time high" costs.

Force majeure questioned
In particular, the IK criticised raw materials manufacturers for calling ‘force majeure’ as a reason for stoppages in supply when in many cases, it said, the situation did not meet requirements for ‘force majeure’.

It said that ‘force majeure’ was defined by European jurisprudence as a situation that has to have an exterior cause – in other words, an act of God.

"A mere assertion of technical problems with the equipment is not sufficient. If primary products fail to be delivered this is in general not classed as force majeure unless the failure of delivery is caused by an act of God," the association said in a statement.

Margins under threat
Etma, meanwhile, said that its members had seen plastics prices rise by up to 54%, while paper prices rose by 77%, between June 2009 and June 2010.

Etma president Martin Hintz said: "The raw material price developments in the last 12 months are now drastically squeezing the European tube producers’ margins.

"This is a major problem for the industry because in any business, reasonable margins are a precondition for securing innovation, sustainable production and necessary investments in new technologies."

UK associations have also recently spoken out about the problem of rising prices.

In March, flexible packaging body Pafa warned that buyers would need to prepare for price rises after price rises had made business conditions "intolerable" for its members.