Giuseppe Lavazza, Vice President of Multinational Coffee
Inflation, sky-high commodity prices, logistical difficulties which translated into demanding costs: “300 million more for 2022, equal to the entire margin in 2021 but we have continued to invest at a rate of 80 million per year”. Market instability: “We have changed the budget six times this year.” Giuseppe Lavazza, Vice President of Multinational Coffee, a symbol of Italy in the world, joins the appeal of those calling for Prime Minister Mario Draghi to remain at the helm of the country. «Never as in this moment of strong instability in the markets, it is necessary to complete their tasks. In an uncertain context, we need a safe beach in the country ».
But in a moment – says Lavazza – when a labor reform can no longer be postponed, with the cutting of the tax wedge, «An important step in making work more dynamic and competitive. Important above all to convince young people to stay, to work in our companies – which is one of the most difficult aspects now – and for us entrepreneurs it is necessary to pass on our business to future generations. Social promotional levers are needed to protect tomorrow’s work ». That is also why Draghi must remain.
Lavazza recognizes himself in the so-called “GDP party” as an exponent of the business world investing in the country and bringing made in Italy to the world. The coffee group collects 70% of its 2.3 billion in sales abroad. There are 33 billion cups of coffee consumed every year, about 628 per minute. The entrepreneur remembers the meeting with the Prime Minister who in April, on a visit to Turin, “came to our new headquarters in Nuvola, part of a large project for the renewal of a district in the city’s northern belt, also problematic from a social point of view”.
What words from Draghi have impressed you?
“He reiterated the role of politicians and institutions that must also be of service to entrepreneurs, those who are good and brave, especially in the most difficult times, who can best express their talent together with their employees. Politicians believe that it is an engine of development, but in reality it is often an obstacle. Let us not forget that in Italy, one of the risks that has the greatest impact is the lack of competitiveness and Draghi has been a guarantee as head of government. He surprised us in the speed of execution – rare in the public sector – and in the strong discipline of the administrative method ».
Energy, inflation, commodities. What are you most worried about?
“Energy increases have a relatively small impact on us. But it is the price of coffee that is going up, an increase that can be quantified in the hundreds of millions. And it’s not just a matter of commodity prices, doubled in one year, there is also logistics. There were no containers to transport coffee in 2021, a real emergency. So we cleaned and filled the tankers’ cargo holds to import some of the approximately 4.5 million bags of coffee we buy in one year from twenty countries. The entrepreneur must have courage but political stability is fundamental ».
How long can companies withstand shocks?
“In 2021, we absorbed a large part of the cost increases, with good management, and then we squeezed margins. We have made some price increases recently, but with a lot of judgment. We are well trained to compete, we have learned that while growing up in international markets. 2021 was a very good year, ending with plus 11%, which meant that we could allocate resources, as we always do, and continue to invest, which we will do again this year. We never back down, we have 127 years of history but the children’s agility, we take a few strokes but we are flexible and we can run ».
The ECB will decide on an interest rate hike on Thursday …
“The Fed has already increased there and the effect has been seen in Europe, with the parity between the dollar and the euro, perhaps intended to go even below that level. And it will be inevitable that the most indebted countries like Italy will suffer more. But if nothing is done, purchasing power will decrease. Then there is inflation, an unknown about consumption. The risk is to end up in the recession spiral. There is no more time to waste, we must modernize the backbone of our country. Only under these conditions can an entrepreneur accept risks, be competitive, not burden public accounts and drive GDP growth ».
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