Beiersdorf has confirmed that ongoing hostilities in the Middle East are interrupting the company's ability to serve important Gulf markets, with operations in Saudi Arabia and the United Arab Emirates taking a direct hit. The German consumer goods firm, known for its Nivea skincare products, said delivery routes and sales in those markets have been disrupted by the conflict.
Vincent Warnery, Beiersdorf's chief executive, told reporters the company has been prevented from delivering certain products to both Gulf states as a result of the fighting. He described the fallout as affecting more than logistics alone.
"That’s something which is impacting not only our cost, but also our consumption. So we hope that the war will finish soon in order to get back to normal business," Warnery said during a media call.
The company had already cautioned in April that sales in some parts of the Middle East were being affected by the conflict. Monday's comments reiterated that the situation on the ground continues to interfere with normal commercial activity in the region.
Warnery also noted Beiersdorf's close watch on oil-market developments, given the link between crude prices and several of the group's input costs. Specifically, higher oil prices can feed through into elevated packaging expenses and other cost items that depend on petroleum-derived inputs.
While oil prices rose following a flare-up of hostilities between the United States and Iran, Warnery said the level of crude prices had not yet reached the peak levels the company had feared. Beiersdorf listed itself on the exchange as Beiersdorf (ETR:BEIG).
The company is therefore balancing two concurrent pressures: disruptions to shipping and sales in the Gulf and the potential for rising production costs should oil climb further. At present, Warnery's public remarks indicate that deliveries to Saudi Arabia and the UAE have been impeded and that management continues to monitor energy markets for signs of cost escalation.
Beiersdorf's comments underscore the link between geopolitical events and supply-chain as well as cost dynamics for multinational consumer-goods producers operating in the region.