Rising raw material prices and costs in Portugal brings numerous small and medium wine producers to the brink of bankruptcy
The price of fuel has skyrocketed. Agricultural diesel, such a sensitive product for the agro-food industry, went up from €0.83 to almost €1.80 a liter. It doesn't make sense for the Government to levy so many taxes in this area.
Fertilizers and other essential agricultural materials have more than doubled. Electricity has risen exponentially. Cardboard boxes have gone up 125%, from €400.00 to over €900.00 a thousand. Bottles have already gone up four times this year, from €0.18 in 2021 to €0.27 in 2022, a 50% increase for a standard bottle. Labels have also gone up 50%. Corks went up 20%. Capsules 30%. All suppliers now charge producers for transporting the materials, which used to be included in the prices. And they are now demanding from small and medium-sized producers payment against delivery, not granting deadlines, as was previously the case.
On the other hand, there are still huge problems in the supply of bottling materials, especially glass and cardboard.
The cost of transport has skyrocketed: for example, the cost of sending a pallet of wine from Lisbon to the Algarve was 35 euros and now it's 65 euros. In addition, the producer is charged extra fees for fuel, which did not exist before.
On the other hand, there is a shortage of labor, at a time when another harvest is beginning. And the legislation is still not adapted to reality, without any flexibility. As an example, if a worker with minimum wage agrees to work on Saturdays, in order to try to increase his pay, he ends up receiving less money at the end of the month, because the automatic step increase harms him drastically.
Producers have only managed to raise their selling prices by about 10%, so the overwhelming majority will make huge losses at the end of the year if they manage to get there.
It is urgent and imperative that the government agree to expedite an extraordinary plan to support the wine industry, a sector that carries Portugal's name far but is being strangled by the brutal increase in costs.