The organisation, which is the European association for the self-adhesive label industry, said existing supply chain pressures in the label industry had been aggravated by the Nordic paper shortages.
The Finnish Paperworkers’ Union’s strike at the UPM Pulp, UPM Biofuels, UPM Communication Papers, UPM Specialty Papers, and UPM Raflatac units in Finland started on 1 January and will run until 19 February unless new agreements are reached beforehand.
The Finnish Transport Workers’ Union AKT subsequently commenced a blockade against UPM to support the strikes.
As well as its own-brand UPM Raflatac label materials range, UPM also supplies label substrates to a number of other label manufacturers. One label printer told Printweek the situation had “massive implications” for the overall market.
Finat said that in recent weeks, reports have been received from around Europe that lead times for paper-based label materials – some 70% of total European label demand – have increased by up to three months or more.
Some label printers and raw materials suppliers have even been forced to prioritise the allocation of deliveries among customers now that stocks of raw materials are close to being depleted, the organisation added.
Demand for self-adhesive labels and narrow web packaging had already peaked during the coronavirus pandemic, Finat said, but demand for labels and packaging materials has continued to boom into 2022 due to the rapid general economic revival since last year. This was confirmed by Finat’s latest Radar report, which was released in December.
The organisation said the lack of availability of labels and packaging is likely to hit a wide range of final consumer industry sectors such as food and beverages, health and personal care, medical and pharmaceutical products, chemicals, logistics and retail, consumer electronics, and automotive, among others, and will therefore harm the economic rebound.
Finat managing director Jules Lejeune said: “Until Christmas, we were hopeful that the supply disruptions could turn out to be a temporary adjustment phenomenon, but the present situation demonstrates the vulnerability of an entire sector already operating at the limits of its restricted capacity, from a single incident like a union strike.
“Given the present lead times, it is now likely that we could face these shortages for the remainder of the year, with far reaching consequences for the general economy.
“The past few days I have been receiving comments from members from around Europe who are all very deeply concerned about the dependency of the supply chain on just a few key suppliers. We are calling upon all parties concerned to make every effort in ensuring a sustainable supply of label and base papers both in the short and in the long run.”
