In 2021, European self-adhesive labelstock demand increased by another 7 percent to almost 8.5 billion square meters, after an increase of 4.3 percent in 2020, according to new data reported from FINAT. Underlying these growth numbers were completely opposite fundamentals. Whereas in 2020, excessive demand for self-adhesive labels was driven by the need for labels in essential sectors like food, personal care, medical and pharmaceutical products, demand peaked again in the second and third quarters of 2021 due to the unexpected strong economic recovery around Europe. However, after emerging general supply chain disruptions since last summer, the fortunes of the label industry have turned dramatically since the beginning of 2022 by long-lasting union strikes in a specialty paper mill in Finland and recently, another supplier in Spain.
The mills on strike are responsible for more than 25 percent of the paper grades used for the manufacture of materials used to print, embellish and cut self-adhesive labels in Europe. Although the supply chain of raw materials for labels has been underpinned relatively successfully in early 2022 by label converters themselves (largely funded by the strong preceding trade period and existing label material reserves), this trend is unlikely to continue into the second quarter of 2022. Persistent self- \adhesive materials shortages could then severely disrupt the supply of functional and regulatory labels and packaging in food, pharmaceutical, healthcare and logistics sectors around Europe.
Assuming an average “gross” size of 10 cm2 per label, 8.5 billion square meters consumed in Europe per annum corresponds with an astronomic amount of nearly 16.5 billion labels consumed each week. That’s nearly 50 labels per capita (per week).
Since the end of January, FINAT, national label associations and individual label printers have appealed to the parties concerned in the strike to take into consideration the broader impact of the dispute to their downstream customers: labelstock producers, label manufacturers, brand-owners, retailers and, finally, the consumers in the shops or online. So far, these appeals have not been reflected in an acceleration of the negotiation process.
“As we have seen during the Pandemic, labels are an indispensable component of the essential infrastructure that are difficult to replace,” said FINAT President Philippe Voet. “Without an adequate pipeline of raw materials, label converters will be forced the extend lead times, prioritize customers, put part of the capacity on hold and send workers on leave because there are simply not enough materials to convert to labels. We once again appeal to the partners engaged in the dispute to do everything possible to resume production without further delay. Against the already tight supply chain conditions since last summer and now the hideous invasion of Ukraine by a neighboring country, a further extension of the strike even beyond the current date of April 2 would be socially and economically unsustainable.”