MILAN: Italian media had only just begun talking about the threat of winter gas rationing when Marco Checchi sprung into action to ensure bottle top maker Pelliconi would continue to supply customers including Coca-Cola, Heineken and Guinness.

Pelliconi, which produces 35 billion bottle tops a year, mostly in Italy but also in Egypt and China, stepped up production of energy-intensive semi-finished goods, invested in solar panels and commissioned a prototype of a new digital printer for metal sheets that did not require gas ovens.

“When you run a business, if you keep hearing on the news that gas supplies are at risk, you’ve got to do something. It’s not like you can start screaming and stamping your foot when they actually do halt flows for two hours a day,” Checchi told Reuters.

Like other Italian businesses wrestling with the energy crisis sparked by the Ukraine war, Pelliconi has seen costs for electricity and gas more than triple in relation to turnover this year, compounding problems posed by higher steel prices.

In some cases it has been able to pass on almost two thirds of the cost increases to its customers and plans to further hike prices next year.

Higher prices contributed to the 16.2 per cent rise in manufacturing turnover Italy reported in July on a calendar adjusted basis, but volumes also increased by 1.7pc. That broadly compares with a 0.8pc yearly drop in Germany.

Traditionally the laggard among the biggest euro zone economies, Italy has experienced a more vigorous post-pandemic rebound in terms of industrial output than France and Germany, Intesa Sanpaolo economist Paolo Mameli said.

After growth exceeded expectations in the first half, the situation has worsened rapidly and the government now expects the Italian economy to have shrunk in the third quarter, with the contraction seen lasting until mid-2023.

Published in Dawn, October 23th, 2022