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Why is Britain facing a supply chain crisis?

Posted on Wednesday, November 3rd by

The fuel shortage is one of the latest problems caused by the HGV driver shortage and has joined a very long list of businesses and industries experiencing stock issues. 

Scottish soft drink company AG Barr, maker of the celebrated sugary soda Irn-Bru, is the latest company to be hit by the supply chain snarl-up currently dogging British retail.

The chief executive, Roger White, declared: “There is a tightness with drivers and we have had particular disruption too with materials, particularly aluminium cans. Inflation is all around us at the moment - materials, wages, and supply among other things - so we have to be careful how we manage this.”

AG Barr is just one company from the list of high street businesses that have struggled with stock shortages in recent months, with restaurant chains Nandos and KFC running out of chicken, McDonald’s struggling to make milkshakes, and Iceland trying and failing to keep everyday items like bread and soft drinks on the shelves. Tesco, dairy giant Arla and confectioner Haribo have all likewise reported supply chain issues of late.

The problems have been developing throughout the summer but first really became apparent during the July heatwave when social media was flooded with photographs of empty shelves in shops across the country.

The disruption was considered to be related to the pandemic, staff absences caused by the overzealous NHS Test and Trace app ordering people to self-isolate after coming into contact with someone who had subsequently tested positive for Covid-19, prompting shifts to be rescheduled and services to run late or be cancelled across many industries.

At the same time, many businesses have warned about a huge driver shortage as a result of Britain’s decision to leave the European Union, and their fears appear now to be becoming a reality.

The UK haulage industry estimates that Britain lost 25,000 European lorry drivers due to Brexit, as they were forced to return to their countries of origin by tighter visa rules and the loss of free movement of labour principles as part of the EU.

This fact has contributed significantly to the 100,000 driver shortfall the country is now struggling with, with the coronavirus pandemic and an ageing workforce also worsening the situation.

Even the transport secretary, Grant Shapps, had to agree with his political enemies in Europe and across the aisle that Brexit has been “a factor” in the chaos.

Speaking to BBC Radio 4’s Today programme in late August, Iceland managing director Richard Walker said the lack of HGV drivers “is impacting the food supply chain on a daily basis”.

“We’ve had deliveries cancelled for the first time since the pandemic began, about 30-40 deliveries a day,” he said.“Things like bread, fast-moving lines, are being cancelled in about 100 stores a day.”

Asked if he believed Brexit was the root cause, Mr. Walker answered: “Yes I think so. But it is a self-inflicted wound. I wouldn’t say it’s an inevitable consequence of Brexit… This is caused by the government’s failure to appreciate the importance of HGV drivers and the work they do for us."

“These HGV drivers have kept the show on the road for 18 months during the pandemic and it is criminal that we are not viewing them as skilled workers.”

Co-Op boss Steve Murrells agreed when he told The Times that his company was having to reduce some food ranges because of “Brexit and issues caused by Covid”.

British Poultry Council chief executive Richard Griffiths, in turn, said last week that he had written to home secretary Priti Patel about the shortage being caused by EU drivers returning home and the difficulties now involved in getting more to come to the UK thanks to “the limiting of immigration policies” but had yet to receive a response.

“When you don’t have people, you have a problem - and this is something we are seeing across the whole supply chain. The labour crisis is a Brexit issue,” he said.

Also weighing in over the Nandos chicken shortfall was poultry giant Avaro Foods, whose spokesman said: “Our concern is recruitment and filling vacancies when the UK workforce has been severely depleted as a result of Brexit. This is causing stress on UK supply chains.”

With the petrol crisis providing an unwelcome reminder of the unseemly toilet roll stockpiling we saw at the start of the first lockdown last March, the situation is showing no sign of improvement without intervention.

This is doubly concerning with Christmas just two months away. “The reason for sounding the alarm now is that we’ve already had one Christmas cancelled at the last minute and I’d hate this one to be problematic as well,” warned Mr Walker on Today.

“We start to stock build really from September onwards for what is a hugely important time of year,” he explained.“We’ve got a lot of goods to transport between now and Christmas and a strong supply chain is vital for everyone.”

Also worried about the festive season was Tom Southall, policy officer at the Cold Chain Federation, who told The Independent: “Larger food chains are having to prioritise some products over others. They prioritise possibly what makes the most money or perhaps what’s been popular."

Source: Independent 

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