The status of glass bottle supplies in Europe

News services reported concerns expressed by the European Federation of Wine and Spirit Importers and Distributors in which Federation members claimed to be "confronted with" a shortage of glass bottles.

The Saint-Gobain Packaging Sector reported volume growth of 5.7% for glass container products in Western Europe during the first six months of 2007 compared to first-half 2006. Over the same period, the wines and spirits segments posted growth of 6.4%.

This sudden increase far exceeds the forecasts of both the Saint-Gobain Packaging Sector and its customers and was triggered by the following circumstantial factors:

• An exceptionally warm month of April, which prompted strong demand for seasonal products (e.g., soft drinks, beer);
• The forecast of very early grape harvests, which led winegrowers to secure their bottle supply early in order to meet bottling needs before the new harvest.

The tension was compounded by the sharp rise in sales of single-use bottles in Germany´s mass market distribution sector, as a result of recent regulatory changes regarding mandatory deposits on bottles. To meet the demand of the domestic market, the German glass industry sharply reined in its exports of bottles to France.

In this context, despite the limited flexibility of its production infrastructure, which already operates around the clock 365 days per year, the Packaging Sector of Saint-Gobain has done its best to serve its customers and keep pace with the considerable fluctuations in demand from day to day.

Although the difficulties encountered in this daily management have shown some signs of improvement of late, they have called for an ongoing and in-depth dialogue with both our customers and their trade organizations, particularly to arrive at more reliable sales forecasts. This approach is already widely practiced and is currently being intensified, since our priority is to return to normal as quickly as possible.