Through Johann Foucault
published on
That is Michel-Edouard Leclerc self who says: the price of toilet paper will “rise significantly”† The chairman of the Strategic Committee of the E.Leclerc centers recently made it known in the media.
A situation that concerns all hygiene papers (paper handkerchiefs, paper towels, etc.). Should we fear a shortage in this regard? Elements of response with industry professionals.
The rise in prices, a direct result of the war in Ukraine?
Since the beginning of Russian invasion of Ukraine, the costs of raw materials and energy rose, pushing prices up in many sectors. That of paper is no exception.
“Since February 24 and the start of the war in Ukraine, the price of energy, and in particular gas, has risen dramatically, further deteriorating the economic situation of our industry,” said a spokesperson forEssityan international group specializing in hygiene and health, producing brands such as Lotus, Tempo, Nana, etc.
But to make toilet paper, you need electricity for the machines, gas for those who dry the paper. Not to mention paper pulp, which is also growing strongly, packaging, which has increased little, and transportation, which has been undermined by the increase in fuels.
A price increase well ahead of Ukraine
But the stalemate in the conflict between Ukraine and Russia alone is not enough to explain the situation. Because this sky-high prices had been observed well before the start of the war†
“In reality, the rise in energy costs for a year is linked to the rise in the price of Russian gas, already linked to the situation in Ukraine,” deciphers Paul-Antoine Lacour, General Delegate of the French Union of Cardboard, Paper and Cellulose Industries (Copacel).
In total, costs in the toilet paper sector have increased by 20 to 40% in one year and the upward trend is continuing.
In one year, the company Essity thus recorded a “electricity cost multiplied by 2, that of gas by 4, the cost of paper pulp has increased by +70%. However, these elements are the essential components involved in the manufacture of toilet paper, handkerchiefs and paper towels. †
Also an impact of the Covid?
With the health crisis, the sector has already had difficulties, but mainly of a logistical nature, some of which are continuing with the post-covid economic upswing.
There are still problems in maritime transport, sometimes disorganized, which can cause an extension of delivery times.
How much will it increase?
It is impossible to quantify exactly what the expected increases will be. † The paper pulp will probably increase a little more, admits Paul-Antoine Lacour, but it is impossible to know what the evolution of energy costs will be in the current geopolitical context. In each case, there are no signs of lower costs towards the end of the year† †
Michel-Edouard Leclerc, for his part, offers some general estimates:
In all rays it will move between 0.5 and 15%. On average, it will be +3.5% in all stores in France in the next 2-3 months.
Should we expect a shortage?
An eternal question that seems like a vicious circle. The more there is talk of price increases, the more consumers stock up. The shelves are empty and give the impression of a shortage. Shortage which, even without being proven, encourages more to rush on the products to make supplies, such as this was the case during the health crisis†
“Today in France there is no shortage and no risk of shortages”and I don’t expect a major shortage unless consumers cause it themselves by creating overstocks,” Michel-Edouard Leclerc said Sunday, referring to all products that can be distributed in supermarkets, including toilet paper and groceries.
An opinion also shared by Paul-Antoine Lacour, for the hygiene paper section.
“No risk of shortages, nor perceived haste among our customers”, we also note in the stores of the Carrefour group†
While at Lidlis recommended to limit its purchases, especially in oil and toilet paper, in order to “avoid the phenomena of rush we experienced on these products during the first confinement”, the brand recently indicated to write to us Toulouse Newsstating that “there is no shortage to date”.
Can costs be reduced?
Are consumers doomed to pay more and more for a hygiene product that remains essential? No doubt.
Because now, to cover their costs, manufacturers like Essity must “significantly raise prices for our retail customers. Given the magnitude of the increases, we can no longer absorb these additional costs on our own, as we have been doing for over a year now. Negotiations between manufacturers and distributors are going well.
And at the end of the chain, either the increase is passed on at all levels, up to the shelf price, or the manufacturer and distributor cannot agree.
In this case, and this would be the only situation where we would see the shelves empty, if the negotiations go badly, the only option could be a factory shutdown, to avoid operating at a loss. This has already happened in several European countries.
Raise on all levels
A situation that is frankly not encouraging for the household budget. Especially since it is not only this item of expenditure that is affected, between food products, clothing, fuel, electricity, gas…
“The war in Ukraine may add another layer from the summer, if the conflict continues,” Michel-Edouard Leclerc said.
Not very reassuring.
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