German companies expect more bureaucracy as a result of the Supply Chain Act. This is according to the ifo Institute's May business survey. "In industry in particular, 43 percent of participating companies say they expect negative effects due to an increase in bureaucracy or documentation requirements, followed by wholesale," says Lisandra Flach, Director of the ifo Center for International Economics.
"Many companies also feel indirectly affected by the law, for example through price increases or through their role as suppliers to large companies," says Flach. Martin Braml, co-author of the analysis, says that many companies also fear legal risks in liability issues and doubt the practical enforceability of effectively monitoring production standards at their suppliers.
Service providers expect the least effect, presumably due to fewer international links within their value chains. In May, the ifo Institute asked 7,000 companies how big an impact they thought the national supply chain law would have on their business. The Bundestag will discuss the law on Friday.
