A Gas Shortage Could Crunch Beer Bottles Too
By Carol Ryan, Aug. 23, 2022, WSJ

Ever since bars and restaurants reopened after pandemic lockdowns, Europe’s glass furnaces have struggled to keep up with demand for bottles. Now tensions with the Kremlin could add to the crunch.

European benchmark gas futures hit a record high Monday following news that the Nord Stream pipeline between Russia and Germany will close for three days of maintenance. Investors are increasingly concerned that Moscow will find pretexts to throttle
supplies of the fuel to Europe, forcing governments in the region to introduce rationing.

Drinks companies are among those affected. They have backup plans for their own industrial processes: Beer companies, which use gas to heat water for the brewing process, can temporarily switch to oil. Carlsberg will be able to run its roughly 40
European breweries on oil from early November.

Getting enough bottles could be tricker. Europe’s glass industry relies heavily on gas, which is used to heat furnaces to 1,400 degrees Celsius to melt shards and other ingredients. Most glass plants can’t be shut down as furnaces risk being
destroyed when molten glass solidifies inside them—the reason they run continuously for their 10 to 15-year lifespan. They can be put on “hot hold,” a state that keeps the material inside liquid, but this still needs up to 75% of normal gas
consumption with no glass output.

Even a moderate reduction isn’t ideal. A 15% cut in gas use, the level that European Union member states need to come up with, could lead to a drop in glass production of more than double that rate, according to one industry professional.

Glass manufacturers are lobbying for priority access to gas and warning governments that powering down European furnaces and importing bottles would destroy the region’s industrial assets. But other sectors also are asking for protections. Companies in
the chemical and pharmaceutical industries point out that they make inputs for fertilizers and drugs that are vital for the region’s food and medicine security.

There is already a bottle shortage in Europe. Alcohol companies have struggled to get enough supply since the region’s night venues reopened. As businesses switch from plastic containers to glass to meet their sustainable packaging goals, competition
for bottles is intensifying. In 2021, glass production increased by 5% as furnaces tried to keep up with demand, according to the European Container Glass Federation, more than double the industry’s average growth rate over the past decade.

The shortage will make it hard for alcohol companies to build their bottle inventories ahead of winter. The biggest distillers and brewers, such as Diageo and Heineken, will probably get priority access as they are such important customers, but they can
expect to pay more. The cost of a bottle for a decent Scotch has increased from 30 cents a year ago to around 45 cents today, according to one major alcohol company. As glass packaging makes up a quarter of liquor companies’ costs of goods sold, this
will need to be passed on to increasingly pinched consumers to protect profit margins.

Brewers and distillers aren’t at the very center of the European gas crunch, but they could illustrate how the crisis is filtering through to the region’s companies in ways that investors might not immediately anticipate.

https://www.wsj.com/articles/a-gas-shortage-could-crunch-beer-bottles-too-11661251600

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On Tuesday, August 30, 2022 at 2:39:12 PM UTC+8, David P. wrote:

A Gas Shortage Could Crunch Beer Bottles Too
By Carol Ryan, Aug. 23, 2022, WSJ

Ever since bars and restaurants reopened after pandemic lockdowns, Europe’s glass furnaces have struggled to keep up with demand for bottles. Now tensions with the Kremlin could add to the crunch.

European benchmark gas futures hit a record high Monday following news that the Nord Stream pipeline between Russia and Germany will close for three days of maintenance. Investors are increasingly concerned that Moscow will find pretexts to throttle

supplies of the fuel to Europe, forcing governments in the region to introduce rationing.

Drinks companies are among those affected. They have backup plans for their own industrial processes: Beer companies, which use gas to heat water for the brewing process, can temporarily switch to oil. Carlsberg will be able to run its roughly 40

European breweries on oil from early November.

Getting enough bottles could be tricker. Europe’s glass industry relies heavily on gas, which is used to heat furnaces to 1,400 degrees Celsius to melt shards and other ingredients. Most glass plants can’t be shut down as furnaces risk being

destroyed when molten glass solidifies inside them—the reason they run continuously for their 10 to 15-year lifespan. They can be put on “hot hold,” a state that keeps the material inside liquid, but this still needs up to 75% of normal gas
consumption with no glass output.

Even a moderate reduction isn’t ideal. A 15% cut in gas use, the level that European Union member states need to come up with, could lead to a drop in glass production of more than double that rate, according to one industry professional.

Glass manufacturers are lobbying for priority access to gas and warning governments that powering down European furnaces and importing bottles would destroy the region’s industrial assets. But other sectors also are asking for protections. Companies

in the chemical and pharmaceutical industries point out that they make inputs for fertilizers and drugs that are vital for the region’s food and medicine security.

There is already a bottle shortage in Europe. Alcohol companies have struggled to get enough supply since the region’s night venues reopened. As businesses switch from plastic containers to glass to meet their sustainable packaging goals, competition

for bottles is intensifying. In 2021, glass production increased by 5% as furnaces tried to keep up with demand, according to the European Container Glass Federation, more than double the industry’s average growth rate over the past decade.

The shortage will make it hard for alcohol companies to build their bottle inventories ahead of winter. The biggest distillers and brewers, such as Diageo and Heineken, will probably get priority access as they are such important customers, but they

can expect to pay more. The cost of a bottle for a decent Scotch has increased from 30 cents a year ago to around 45 cents today, according to one major alcohol company. As glass packaging makes up a quarter of liquor companies’ costs of goods sold,
this will need to be passed on to increasingly pinched consumers to protect profit margins.

Brewers and distillers aren’t at the very center of the European gas crunch, but they could illustrate how the crisis is filtering through to the region’s companies in ways that investors might not immediately anticipate.

https://www.wsj.com/articles/a-gas-shortage-could-crunch-beer-bottles-too-11661251600

Plastic bottle with sheer clarity material can be produced to substitute glass bottle. Advanced plastic material can be produced in an advanced way of manufacturing into plastic material. It can be made like in a clear glass or frosted glass, and in the
right transparency, with clarity even with thickness wall that can be felt like holding a glass bottle instead.

Plastic bottle is easier to produce and hence cheaper processes to produce and much easy to handle it, too. When glass material though made from silica sand, the process is costly as gas is used to burn the glass and heat the bottle into shapes. But when
plastic is made, the material is by resin and heat injection into variety of sizes and shapes, too. In short there always alternative way to do things when come to a problem with shortage of materials.

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