The raging energy crisis has claimed another victim: toilet paper.
After enduring the hoarding fiasco brought on by COVID-19 government shutdowns, the future appeared bright for toilet paper manufacturers. Now, however, the energy crisis has wiped out the industry’s success stories in a very short time. The German company Hakle, a traditional toilet paper manufacturer, in business since 1928, has now succumbed to high gas prices and has filed for bankruptcy.
Back in March, Hakle warned that skyrocketing gas prices would weaken supply, as its production processes are particularly energy-intensive and require large amounts of gas in the drying process. Volker Jung, managing director of the 220-employee company, announced in a statement: “Since the start of the Corona pandemic in 2020, the energy-intensive paper industry has been subject to severe distortions in the global raw materials, logistics and energy market.” This situation was further exacerbated in the months following Russia’s invasion of Ukraine, and the company was neither willing nor able to fully pass on the increased costs to customers.
Jung, however, hopes to continue operating independently, thanks to the bankruptcy filing. “We are confident that this attempt at reorganization will succeed in this challenging situation of what can be described as a historic energy crisis,” Junge said. “We hope there will be someone who will buy the company and work with us to move things forward.”
Distribution partners say security of supply is set for now. Likewise, the Federal Labor Agency has guaranteed wage continuation payments until the end of November 2022.
Many companies are expected to file for bankruptcy in Germany this fall as the energy crisis worsens. According to a report by the Institute for Economic Research in Halle (IWH), there were 26 percent more insolvency filings in August alone than in the same period last year. According to an IWH forecast, insolvencies in October alone will rise even further to one-third above the levels of 2021. This situation will be further exacerbated by the ECB’s planned interest rate turnaround and the increase in the minimum wage from October.
While prices for toilet paper and other paper products have risen dramatically over the past months, the German newspaper Focus advises its readers not to go back to hoarding, but to instead “be sure to look out for discounts and coupons.”
