The EU glass container industry is dogged by overcapacity, due to long-term factors such as substitution from polyethylene terephthalate (PET), metal cans, cartons and short-term factors such as cheap wine imports from low cost countries, according to the credit rating agency Standard & Poors. It said that weak volumes continue to be a problem for most players, but it is being partially offset by price increases. The report found that the substitution of glass is advanced in the non-alcoholic beverage segment, but at the early stages in beer and spirits packaging, although glass is expected to retain its position in the premium segment. It highlighted the significant barriers to entry that exist, including prohibitive transportation costs, high capital intensity and long term supply agreements. It also stated the EU glass industry remains fragmented.
