As the year draws to a close, it has become more evident than ever that the geopolitical and economic environment along the leather supply chain has shifted significantly in the past 12 months.

The increasing fragmentation of trade zones, more volatile consumption patterns, regulatory interventions and a noticeable relocation of production capacities have created an environment in which past certainties are losing relevance while new dependencies continue to emerge. Nowhere is this more apparent than in Europe, where persistently high energy and labour costs, stricter environmental requirements and rising financing burdens are undermining the economic foundation of many price-sensitive product groups. Segments that for years formed the stable backbone of European leather production are losing their viability. The consequences are already visible: production is shifting to lower-cost regions, European downstream manufacturers and brands are becoming more dependent on external supply chains, and a structural erosion of industrial capacity is taking place, an erosion that may accelerate further unless fundamental adjustments are made.

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