The price of beer, wine and bottled food could rise this summer as Canada“s major glass producer, Consumers Packaging Inc., tries to pass on huge increases in the price of natural gas, which is consu…
The price of beer, wine and bottled food could rise this summer as Canada“s major glass producer, Consumers Packaging Inc., tries to pass on huge increases in the price of natural gas, which is consumed in large quantities in glass manufacturing. But many brewers, vintners and food companies are digging in their heels, refusing to pay any more for their bottles, setting the stage for a battle this spring between glass makers and bottle buyers. “We“re in the third year of a 10-year contract,” said one major bottle user. “If they come asking for a price increase, we“ll say “No, forget it.“ We“ve got a contract and we“re not obliged to pay any more.” But smaller buyers, especially in the thin-margin food and wine industries, admit they are worried because glass bottles can account for 25% or more of the final price of their product, and they have little room to manoeuvre. The food and beverage companies say they have little leverage because Toronto-based Consumers Packaging controls 85% of all the bottles and glass jars sold in the country. “We“re not a monopoly, but we“re close to it,” acknowledged Don Gracey, Consumers“ president. Moreover, there are only four or five alternative bottle producers in North America, and they are all facing huge increases in the price of natural gas.