According to HDS, the federation of the German shoe industry, its overall turnover fell by 3.6 percent to €2.7 billion last year. While sales were up through September, they dropped at a double-digit rate in the last quarter. The difficulties came mainly from a softened demand for German shoes at home, where German shoe suppliers saw their sales decline by 5.2 percent, whereas their foreign sales grew by 0.6 percent to 785 million pairs. This meant an increase of the share of the foreign business from 27.9 to 29.1 percent of the total turnover.

Imports remained virtually stable, going down by 0.2 percent in volume to 498.5 million pairs compared with 2007. The imports were marked by a continued dramatic shift from manufacturing countries within the EU to the Far East. Imports from China increased again by 4.9 percent to 264 million pairs, building up to a stunning 53 percent share of all imports. Imports from Vietnam grew by 10.8 percent to 79 million pairs, or 15.8 percent of the imports.

In return, imports from other European countries, namely from Italy and Spain, continued to drop. Shoes from Italy dropped by 21.2 percent to only 27 million pairs. Imports from Spain fell by 23 percent to a meager 5 million pairs.

Exports by German shoe companies were in a healthy shape in 2008. They grew by 10.9 percent to more than 156 million pairs. For the first time ever, Austria, traditionally the strongest market for German shoes, was overtaken by Poland. Sales to Poland jumped by 20 percent to 23.6 million pairs, or a share of 15 percent of total German exports. Sales to Austria slipped slightly by 1 percent to 22.4 million pairs, or a share of 14.3 percent.

Developments in Eastern Europe are a source of major concern for German exporters. The downfall of the Russian ruble is not the only problem there. HDS is worried about an upcoming tariff union between Russia, Kazakhstan and Belarus that might lead to an increase in tariffs on shoe imports under the conditions currently applied by the Belarussian government, which would increase the tariffs by some 100 percent.

Germany’s production of footwear is estimated by HDS to have slipped slightly by 1.1 percent to 26.3 million pairs in 2008. This figure is extrapolated from the first three quarters of the last year. The number of manufactured outdoor shoes with leather uppers fell significantly by 9 percent while less labor-intensive items such as sandals and safety shoes managed to increase

HDS, which sees itself as a champion of global free trade, points out that the shift from European manufacturing countries to the Far East cannot be halted by protectionist moves, which HDS attributes especially to CEC, described as an Italian-dominated organization that represents mainly European companies that manufacture in Europe. HDS continues to stay out of CEC, but well-informed sources indicate that some important changes may take place in the future, depending on who is named as the next president of the lobby in Krakow in June.

As mentioned in the last issue of Shoe Intelligence, the antagonism between Germany and Italy has gone into a new round after Italy’s Guardia di Finanza seized shoes imported from Germany at the beginning of this year. The core of the quarrel is the use of a pictogram that certified the use of «real leather.» The Italian tanners’ association claims that it registered this logo as a trademark in Italy back in 1978. HDS argues that its members’ use of the pictogram corresponds to the EU directive 94/11/EC, which requires the use of the logo to highlight real leather goods. HDS has already approached the European Commission in this matter and called CEC for a stance in this case. HDS does not rule out legal action against the Italian tanners.

At the GDS, Ralph Rieker, chairman of HDS, presented the federation in a new structure that became effective last Jan. 1. As of that date, HDS is the only representative of the German shoe manufacturers after it merged with regional associations such as the ones of Bavaria and Rhineland-Palatinate, where Pirmasens is located.