Prices of Raw Materials force the European Leather industry
to shift increases on to its customers
During the last COTANCE Council meeting held on 10 November in Lausanne (Switzerland) under the Presidency of Jean-Claude Ricomard (Tanneries Roux, France), the representatives of the leather industry from France (FFTM), Finland (FLIA), Germany (VDL), Italy (UNIC), the Netherlands (FNL), Spain (CEC-FECUR), Sweden (SG), Switzerland (VSG) and the United Kingdom (UKLF) expressed concern with regard to the trends witnessed in raw material prices.
On the basis of market intelligence regarding slaughterings, COTANCE members do not see any reason for the rise in raw material prices. These should be rather decreasing.
Considering the information provided by all members present and notably an analysis tabled by UNIC, the Italian leather industry association, on the average variations recorded for the various types of hides & skins on the main markets between Jannuary 2005 and today with a special focus on the developments in the current year (see enclosed), price increases are considered injustified.
The increase in prices evidenced affects significantly all major categories with peaks for calfskins of European origin and wool-on sheepskins of the better grades.
The difficulties of European tanners to convey to their customers the importance of the phenomenon weakens their capacity to maintain profitability.
Finished leather prices are thus bound to rise between 2 and 14% according to the reference raw material used. A recent survey on expectations on leather prices that was made among visitors at the last Lineapelle Fair confirm this trend.
Lausanne, 10 November 2006
SUMMARY BRIEF ON HIDES FROM OLDER UK CATTLE
The current UK system differs from the rest of Europe. Since 1996 the system has remained essentially unchanged. When any Over Thirty Month (OTM) cattle are slaughtered, the entire carcase is destroyed except for the hide, which can be recovered for tanning – at least to wet blue (or the equivalent non-chrome tannage) in the UK. A significant proportion of these hides are exported from UK in the wet blue. All untanned by-products have to be controlled and destroyed. The number of hides available under this arrangement has averaged about 800,000 a year since 1996.
With the progressive elimination of BSE in the UK, the UK is now beginning to adopt a system similar to the rest of Europe. All cattle born on or after 1 August 1996 can go into the food chain, provided that they test negative for BSE and the hides can be freely traded. This change is currently planned to begin in the early weeks of November 2005. This is likely to produce around 450,000 cattle and hides per year.
There is planned to be a continued “purchase for destruction” scheme (the Older Cattle Destruction Scheme, OCDS) for all cattle born before 1 August 1996, because these will never be allowed into the food chain (because they were alive before the introduction of the feed ban). For legislative reasons, this scheme is not expected to start before January 2006. The records for these cattle are uncertain, but it is estimated that there are about 700,000, and the plan is that the scheme for slaughtering them would last for a maximum of three years.
But there is a clash of legislation regarding the hides from these cattle. While the current UK legislation (with EU backing) allows the use of the hides, provided that all untanned by-products are controlled and destroyed, once the UK OTM scheme is withdrawn and replaced by the “purchase for destruction” scheme, according to EU TSE regulations and the Animal By-products Regulations, the hides must be destroyed.
The UK government has been working with DG SANCO to make a change to the EU legislation. It is understood that DG SANCO are sympathetic but progress is slow, partly, it seems, because the European Parliament are believed to want a comprehensive review of the TSE regulations in general. The particular issue relates to a requirement to destroy entirely all “cohorts” of animals that test positive for BSE; however, for these older, pre-August 1996 cattle, the records are not adequate to identify these – so the only legal option at present is to destroy them all, although there is generally agreement that there is no significant risk from recovering and processing these hides.
This is an issue that applies in all countries – but because of the history it appears to have most impact in UK. However, it is understood that Portugal has already asked for the same change but has been refused.
So while this is most directly a UK issue – the potential destruction of 700,000 perfectly safe and usable hides, we believe is an issue for the whole of the EU industry; in a situation where we are lobbying for free trade and access to other countries raw material, it is surely nonsense to destroy unnecessarily 700,000 of our own hides.
We request the Social Partners to agree to make a joint approach in order to emphasise to DG SANCO, and any other relevant Commission departments the importance of urgency to arrange the required changes, with appropriate safeguards, to avoid the unnecessary wastage of these hides.
15/10/2005
Consequently, the Social Partners issued the following declaration :
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| Confédération des Associations Nationales des Tanneurs
et Mégissiers de la Communauté Européenne
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European Trade Union Federation: Rue J. Stevens 8 - 1000 Bruxelles |
Joint Declaration of the Social Partners of the European Leather Industry
Committee Meeting of 14/10/2005
COTANCE and ETUF:TCL, the Social partners of the Leather industry at EU level call on the European Commission to come up quickly with the necessary arrangements required in EU legislation so as to avoid the unnecessary wastage, of some 700.000 cattle hides in the UK, but also in other EU countries that represent work and income for the leather sector, securing jobs during the next 3 years.
The Social Partners of the European Leather Industry understand that the current socio-economic conditions don’t permit the industry assuming such a loss of raw materials when access to extra-EU hides and skins becomes increasingly narrow and it is an EU trade priority to open up global raw materials markets eliminating export barriers applied by trade partners.
COTANCE and ETUF:TCL understand that imposing adverse socio-economic consequences on Europe’s Leather Industry because of a clash of legislations is not acceptable and there is a general agreement by international experts that there is no significant risk from recovering and processing these hides of cohorts of animals that test positive for BSE.
COTANCE and ETUF:TCL insist on the urgency of solving this issue efficiently and with the necessary safeguards regarding health and safety.