Business Update

Further to our last correspondence please see below an update on the difficulties that the foodservice sector is currently experiencing within the supply chain.

Freight Surcharges

Although the backlog of goods entering into the country appears to be easing somewhat importing goods from Europe and beyond continues to be met with surcharges at the ports. Congestion and container release surcharges are still in place and these are expected to stay with us for the foreseeable future.

How this affects us: The shipment of goods, especially from the Far East, are still proving difficult and expensive. The shipping company who generally handles our containers of Flavours Tuna are currently asking $8k per container to ship to the UK (Previously $1K). As such we have left it at the factory. The surcharge on importing our Chopped / Plum Tomatoes has increased yet again.

What we are doing: We have sourced an alternative Tuna brand. The surcharge on Tomatoes has been absorbed by our company.

Logistics

The Road Haulage Association estimate that we currently have a shortfall of 100,000 HGV drivers in the UK. This combined with a high demand for goods due to the economy opening back up has created a logistical nightmare for companies who deliver goods throughout the UK. Langdon’s who transport the majority of chilled and frozen goods in the North of England currently have 900 vehicles and less than 600 drivers. As a result they are struggling to to get goods both in and out of their distribution depots.

How this affects us: Many of our deliveries are arriving later than scheduled, with little or no warning. Misplacement of stock is also resulting in our deliveries arriving with missing pallets / goods.

What we are doing: We are giving our supplier extra notice for goods, brought forward our requested delivery dates and we have increased our stock levels wherever possible.

Supplier Staff Issues / Production Problems

Due to the effects of Brexit / Covid many manufacturers throughout the UK are struggling to find staff to work in their factories; those who can find the staff have to pay increased wages to fill these roles. Many Foreign Nationals who previously filled these positions chose to return home due to the uncertainty of Brexit and a high number of factory workers found work elsewhere when factories were forced to close due to lack of demand brought on by Covid. This problem is continually being exasperated by Track & Trace via the Covid Ping App. One of our key suppliers is currently running with less than half of the staff that they need to keep up with production and several more of our suppliers are in a similar position. These issues have been further impacted by the upsurge in demand for goods throughout the UK; the public are once again venturing out to socialise and the majority families are choosing to holiday within the UK this year instead of travelling abroad.

In order to alleviate the pressures within the factories we are finding that a number of our suppliers are currently producing just their ‘core lines’; this speeds up production but obviously leads to restrictions on choice.

How this affects us: Product shortages

What we are doing: We are continuously liaising with our suppliers in order to secure stocks once they become available.

Product Supply Issues

We have for some weeks now struggled with supply for many of our disposables range… Paper cups, bags and food trays. The reasons behind this are numerous, raw material shortages, shipping issues and a surge in demand etc. These products are coming through in dribs and drabs but all too regularly we have been without stock on some of these lines and for this we can only apologise.

A shortage of Aluminium has become a big problem worldwide. The world Aluminium market is expected to slip into deficit by 100,000 to 200,000 tones this year and this is already impacting on several of our suppliers. Many of our canned beverage suppliers are restricting their range as they can’t source enough Aluminium to fulfil their requirements. This includes the beverage giants like Coca Cola. Our supplier of Quiche has been forced to stop production as they can’t get supply of the Foil Trays that they are packed in. Securing stocks of Aluminium Tin Foil has proved difficult for several weeks too and price increases on this product are expected shortly. The Aluminium supply issue is set to be with us for several months.

How this affects us: Product shortages

What we are doing: We are trying to secure consumable stocks as soon as they become available. We now have eight suppliers for these item (Pre-Covid we had just two). Like every other wholesaler in the country we can’t unfortunately do anything regarding the worldwide aluminium shortages we are however holding more stock of the PET Beverage Bottles should you wish to make a switch to these until the cans become available again.

Pricing

In addition to increased labour costs many of our suppliers have seen a significant rise in the price of raw materials and packaging; as a result they are looking to cover these extra costs by increasing their prices. Price rises have become more frequent and the majority of our suppliers have now implemented in the last few months.

How this affects us: Price Increases

What we are doing: Talking to numerous suppliers in order to offset these increases as much as possible; very few suppliers however are interested in taking on any new business at this time, this unfortunately puts us in a poor position when it comes to price negotiations. We feel that the most important thing at this time is securing a continuous supply and not price.

The issues I have highlighted above are affecting the whole industry, not just here at Premier but we do feel confident that these issues will settle down in the coming months; meanwhile please be assured that our company is doing everything we can to minimise any price increases and maintain a continuous supply of goods.

If you would like further clarification on any of the above or If we can be of any assistance in any other way we are here ready to take your call. The office is open Monday to Friday 9am to 4.30pm 01977 613053.

Thank you for your continued support.