Coca-Cola, wine harvest cause bottleneck in Germany | Business| Economy and finance news from a German perspective | DW | 22.03.2019
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Coca-Cola, wine harvest cause bottleneck in Germany

Coca-Cola and a good wine harvest are no doubt two completely different things. But in Germany, they merge when it comes to explaining an unparalleled shortage of glass for wine bottles. DW's Natalia Smolentceva reports.

Oliver Schell owns a family winery in Germany's Ahr region. He was ready to fill his first bottles with 2018 vintage wine as early as last week. Sadly, he found out that schlegelflaschen — the elegant long bottles made of white glass that he normally uses for his wine — are not available anymore. He had to settle for alternative, shorter bottles.

But there isn't an alternative for everything. Bottling at the Schell Winery has to be postponed. "We have the wine ready in the cellar, but we can't get it to our clients," says Schell. In the 10 years that he has been in the wine business, he's never faced that problem before.

For many winemakers in Germany, now is the time to finally put the wine in bottles. But the glassmakers cannot produce enough bottles, says Andreas Köhl, spokesman of the Farmers and Winegrowers' Association in Rhineland-Palatinate. "Especially the green 1-liter bottles are in short supply as well as bottles for white wine and rose."  In Rhineland-Palatinate alone there are 4,900 wineries that bottle wine.

Grape harvest in Rhineland-Palatinate, Germany (Reuters/R. Orlowski)

Employees at a Rhineland-Palatinate vineyard harvesting grapes in August 2018

Last year was a very good year not only in Germany: The production of wine increased by nearly 20 percent across Europe. 14 percent more grapes were harvested in Italy last year and 17 percent more in France, says Ernst Büscher from the German Wine Institute. "It means 20 to 27 million hectares more than in 2017. So there is higher demand for wine bottles all across Europe." 

Normally, German wine producers would be able to get bottles from suppliers in other European countries. But not this year.

Not enough capacities

On any wine shelf in a supermarket you will find a great variety of shapes and colors wine bottles can have - they come in different shades of green, with straight sides or a wider base, with distinct shoulders or gently sloping shoulders, you name it.

"The winemaker wants a bottle in a certain color, with a certain weight with a cork or screw, whatever. And if now this certain form is no longer offered by glassmaker A, then I can not necessarily assume that this form is offered by glassmaker B," says Ralf Striegnitz from a big German bottle dealer, Reis Flaschengroßhändler. It supplies clients ranging from family wineries to big producers. 

Watch video 01:22

German wine harvest in 2018 exceeds all expectations

The consolidation in the industry of glass bottle producers is an added issue, says Büscher. There used to be more small glass producers. Few big international glassmakers are dominating the market now, and they are more interested in producing only one specific type of bottle.

According to data from the The Federal Association of the German Glass Industry (BV Glas), there are 10 big glass producers in Germany that operate 31 sites. They generate around 20 percent of the whole glass industry revenue.

"Production in a glass manufactory is very rigid. It operates throughout the year in a 24/7 mode. When there is considerable additional demand, it cannot simply be increasing working hours, because working more is not possible," explains Nikolaus Wiegand, the managing director of the Wiegand-Glas glass manufacturer.

This year it has received more orders than usually, but they could not satisfy everyone. Their glassworks cannot produce more than 2.8 billion bottles a year.

Limited capacities add to the problem. Three glass-melting tanks in the south and east of Germany are out of work. They have to be repaired. It is a standard procedure, explains Wiegand: "A glass-melting tank is worn out after 10-11 years.  And then it's turned off and repaired or rebuilt."

Back from plastic to good old glass

The demand for glass products has increased substantially in recent years, says Striegnitz. Not only for wine bottles, but bottles for spirits and jars. "The customers have become more ecologically oriented," he says. "There is a trend away from plastic packaging."

Not to forget, another reason for increasing demand are orders from a big soft drink company. 

"The main problem is that one big soft drink producer shifts from PET [polyethylene terephthalate] bottles back to glass bottles and therefore it needs huge amounts of glass bottles," says Büscher. "So the glass producers do not have reserve capacities for making wine bottles."

Striegnitz confirmed that a big soft drink manufacturer in the Mannheim area in Germany switched from PET bottles to glass. "And they are making millions of bottles. They need a some 50,000 - 60,000 bottles per hour."

Coca-Cola bottles

Coca-Cola beverages in German supermarkets more often than not come in plastic bottles, but there may be a lot more glass bottles soon

One name that insiders mention in this context is Coca-Cola.

The company is investing around €50 million ($56.8 million) in 2019 in two new glass production lines in Mannheim and Lüneburg that are expected to start operating in the fall.

A spokesperson for Coca-Cola Germany confirmed that they had started a big marketing program for traditional Coca-Cola bottles and would additionally sell 1-liter Coca-Cola glass bottles. "There is a trend to [produce more] glass bottles, but our objective is to give clients a choice between  PET bottles or a glass bottles."

Even though Wiegand-Glas does not produce bottles for soft drink producers, it's also heard about Coca-Cola's plans to use more glass bottles.

"The glassmaking machine doesn't care whehter the end product is a Coca-Cola bottle, a wine bottle or a beer bottle. In the end, it's just about going for a different shape or color of the bottle; the machine can do it all."

 

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