Swiss biscuit manufacturers caught between currency-induced challenges and political difficulties

Turnover and sales volumes abroad recorded drops for the fifth time in a row – despite impressive growth in the Middle East and Asia. During 2015, the 24 industrial manufacturers of Swiss long-life bakery products sold 3.2% fewer items (43,972 t) compared to 2014, with the associated turnover dropping by 1.8% to CHF 447.9 m. Domestically, the companies in Switzerland’s long-life bakery product industry sold 2.5% fewer items in 2015 (30,923 t) compared to 2014, resulting in a 0.4% drop in turnover to CHF 336.6 m. There was a 1.2% increase in imported long-life bakery products compared to 2014. Domestic sales (local and imported long-life bakery products) dropped by 1.0% overall, while local manufacturers’ domestic market share dropped by 1.5% to 58%. A 5.0% decline in products sold (13,050 t) was recorded in the export sector, causing turnover to drop by a similar margin to CHF 111.3 m (-5.9%). Germany continues to be number 1 out of the 86 export destinations for Swiss long-life bakery products, with a share of 28.2%, although exports to Germany did drop significantly (by 24%) compared to 2014 (export share: 35.1%). The other key export countries remain unchanged with France (21.2%), Saudi Arabia (7.6%) and Sweden (5.6%). Considerable quantity increases were particularly recorded for deliveries to Saudi Arabia (25% growth), China (number 11 on the list of export destinations, +86%) and Japan (number 12, +30%).

The strong Swiss franc impacted negatively both on export business and the domestic market in 2015. And the outlook for the future appears to be particularly clouded by political uncertainty and statutory difficulties. The agricultural border protection scheme has now forced Swiss biscuit manufacturers to buy flour and butter at protected prices well above European levels. The act known as "Schoggigesetz", which counterbalances this agropolitical cost handicap for exports, will be banned from 2021, following pressure from the WTO.