COTANCE calls on the European Commission to look into the worsening of the market conditions for EU Tanners’ hides & skins supplies and access to finance

The COTANCE Council met on February 18, 2013 in Brussels under the chairmanship of President Rino Mastrotto (Rino Mastrotto Group, IT).  The review of the state of trade in Europe’s leather industry reveals some positive features in certain sub-sectors such as top fashion and automotive while others are still struggling with the reduction in the overall demand for leather, such as furniture. The most recurrent complaint among all delegates was the worsening of the market conditions for the supply of the industry’s raw materials and the consequent price peaks in certain types of hides and skins. Paradoxically, calfskins have become more expensive than meat.

European Tanners regret the lack of action of European authorities in addressing the adverse economic effects of the progressing critical shortage of raw materials on open markets that drive prices to unsustainable levels. The shortage of raw materials on the European market is due to export restrictions set up by major producing third countries, such as Argentina, Brazil, India or Pakistan, and the exponential increase in the exports of EU hides and skins resources to competitors. The issue is well known to European authorities as it has been evidenced and documented in the relevant DG Trade Leather sector Market Access Committee. The recent Commission Staff Working Document on POLICY OPTIONS FOR THE COMPETITIVENESS OF THE EUROPEAN FASHION INDUSTRIES — ‘WHERE MANUFACTURING MEETS CREATIVITY’ (SWD(2012) 284 final/2) adopted on October 5, 2012 says: “… Today, more than ever, global competition for raw materials is increasing. … Prices of hides and skins are at their highest level in nearly a decade, with demand greatly exceeding the shrinking supply. ... Consequently, action at EU level will be developed to secure undistorted access at fair prices to the raw materials the fashion industries need. …

The “stress test” that the European leather industry currently suffers in the area of raw materials risks affecting seriously its competitiveness and the sustainability of thousands of jobs in Europe’s tanneries.

European tanners understand that their trade authorities ought to use all available instruments to redress this critical situation including the use of export restrictions as foreseen for such type of cases in Council Regulation (EC) No 1061/2009 of 19 October 2009 establishing common rules for exports.

Likewise European Tanners denounce the concerning shortage of credit for their SME’s. Access to finance in EU Member States is at its lowest levels with credit conditions for SME’s that penalise operators when at all available. Europe’s leather industry needs specific official support for obtaining fairer credit conditions.

Brussels, 22 February 2012