Powder Keg - How the War in Ukraine Could Disrupt the Global Skiing Industry!
Foreign Policy Brief #144 | By: Reilly Fitzgerald | August 16, 2022
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The war in Ukraine has had an impact on global markets. Ukraine is a mass producer of wheat and other food items. They also are a manufacturing hub for alpine and cross country skis with a factory in Mukachevo, Ukraine, owned by Austrian-based company, Fischer Sports. Fischer is one of the leading manufacturers of skis and other skiing-related items such as ski boots and ski poles.
According to the Cross Country Ski Areas Association, based in Vermont, Ukraine produces half of the skis sold globally each and every year; globally there are around four million skis manufactured each year. This is not just a problem for Fischer but for most major ski companies who allow Fischer to manufacture at least some of their skis for them, these brands include Rossignol, Alpina, and Scott.
According to Planet Ski, there are many other ski manufacturing factories inside of Ukraine that have been impacted by the war. Rossignol, though they use the Mukachevo facility owned by Fischer, has a factory outside of Lviv; and Technica also has a factory in-country. These factories all ceased operations directly after the war broke out in Ukraine. However, they have slowly started to come back online as the Russian military has been pushed eastward and much of the invasion stalled.
The war in Ukraine has had major consequences in terms of disrupting the global supply chains and also impacting consumers by seeing price hikes globally; and most notably, at the gas pump.
According to the New Hampshire Business Review, Fischer has a company presence in New Hampshire with about a dozen or so employees. The war has disrupted their business in Ukraine because trains that, were once used to move goods, are being used to move people or supplies for the war effort.. The NH Business Review also cites that the largest import from Ukraine to New Hampshire is ski-related goods, which usually brings in around $8 million to the state economy.
This is not the first time that the Fischer factory in Mukachevo had to cease operations; back in early October, 2020, there was a fire in the facility which halted operations. However, the timing of that issue was late enough in the year that most of the skis for that year had been manufactured and shipped globally. The fire did not help the manufacturing of skis; but neither did the COVID-19 Pandemic, which saw demand for all sporting goods increase dramatically.
The Cross Country Ski Areas Association discussed the role of the “bullwhip effect”, in one of their reports; which suggests that the increase in demand that retail shops are seeing from consumers (which has increased since the start of the pandemic) is leading those shops to order more hard goods from manufacturers and those manufacturers are having a difficult time meeting those demands.
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This difficulty in meeting demands often leads to late shipments or extremely long wait-times for the consumer to receive their goods, which may lead consumers to spend their money elsewhere, and potentially on an entirely different sport; and once the manufacturers produce more goods to meet that extra demand, the need for the demand is gone and retailers are left with goods that no one wants to buy anymore.
Some of the major ski manufacturing companies have factories in other countries in Europe, like Austria for example, and also in China. These companies are able to absorb some of the issues that have arisen out of the closing of the Ukrainian factories; however, some of these factories specialize in specific skis.
For example, Rossignol has a facility in China that they use to make beginner or entry-level ski goods. According to an article by the SF Ski Club, retail goods could be delayed until October for their arrival to ski shops around the world. The article also included the perspective of a Nordic ski store owner in Missoula, Montana, who said that they are not seeing much of these disruptions occurring because they sell the high-end skis that are often produced in the companies’ home country, for Fischer that would be Austria.
It is unclear how these disruptions and increased demand will play out this coming ski season. However, consumers should plan ahead and be patient when buying new skis, as the estimates for when skis could arrive are as early as late August or as late as mid-October.