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Up to a quarter of supermarket milk deliveries by the UK’s biggest dairy supplier have been unable to get through because of a shortage of lorry drivers.

Speaking to Sky News, managing director of Arla Foods UK Ash Amirahmadi warned of a “summer of disruption” unless bold action is taken by the government to tackle the industry-wide problem, blamed on the coronavirus crisis and Brexit.

The dairy giant, which supplies milk to about 2,400 stores each day in the UK, had on average failed to deliver to 10% of outlets due to a lack of drivers, although this had risen to a quarter – some 600 shops – at weekends.

Pic: Arla Foods
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Arla supplies milk to about 2,400 stores each day. Pic: Arla Foods

“Of course that’s something that is a concern,” said Mr Amirahmadi.

As well as “significantly” increasing driver pay, Arla had also offered a £2,000 signing-on bonus, similar to other businesses, like Tesco.

In addition, the company was working with retailers to try and reduce the demand on the supply network.

But Mr Amirahmadi said: “Unfortunately, even with all those things in place we are still not able to make all of our deliveries.”

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While a recent move to extend hauliers’ working hours by an hour would help, he added: “We don’t think that is the solution because it doesn’t sort the underlying issue, which is the shortage of drivers.”

Confirming the company was in discussions with the government, Mr Amirahmadi said: “We need to recognise it is a structural issue, that what we have at the moment is an acute driver shortage.

“Therefore, unless we take bold action on that we could be facing a summer disruption going into the next couple of months.”

Mr Amirahmadi highlighted the need to increase HGV driver testing and temporary visa changes, to deal with the shortage in the short-term.

In the longer term, Arla were committed to drawing on “homegrown talent” through its own training schemes, including apprenticeships.

Dr Judith Bryans, chief executive of the industry body Dairy UK, said: “The UK dairy supply chain has seen quite a bit of disruption as a result of on-going shortages of HGV drivers, causing difficulties for businesses in terms of transporting products.”

HGV
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An extension of drivers’ working hours has been dismissed as a ‘sticking plaster’

Earlier this month, Transport Secretary Grant Shapps announced a consultation to ease driver qualification requirements as part of a package of measures designed to tackle the issue, in addition to the temporary extension of lorry drivers’ working hours from nine to 10 hours a day.

However, the Road Haulage Association, which has said it believes there is a shortage of 100,000 drivers, described the relaxation as a “sticking plaster”.

A Department for Transport spokesman said: “We recently announced a package of measures to help tackle the HGV driver shortage, including plans to streamline the process for new drivers to gain their HGV licence and to increase the number of tests able to be conducted.

“We have also temporarily relaxed drivers’ hours rules to allow HGV drivers to make slightly longer journeys, but these must only be used where necessary and must not compromise driver safety.

“We have no plans to introduce a short-term visa for HGV drivers. Employers should invest in our domestic workforce instead of relying on labour from abroad.”

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Octopus Energy sparks £10bn demerger of tech arm Kraken

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Octopus Energy sparks £10bn demerger of tech arm Kraken

Octopus Energy Group, Britain’s largest residential gas and electricity supplier, is plotting a £10bn demerger of its technology arm that would reinforce its status as one of the country’s most valuable private companies.

Sky News can exclusively reveal that Octopus Energy is close to hiring investment bankers to help formally separate Kraken Technologies from the rest of the group.

The demerger, which would be expected to take place in the next 12 months, would see Octopus Energy’s existing investors given shares in the newly independent Kraken business.

A minority stake in Kraken of up to 20% is expected to be sold to external shareholders in order to help validate the technology platform’s valuation, according to insiders.

One banking source said that Kraken could be valued at as much as $14bn (£10.25bn) in a forthcoming demerger.

Citi, Goldman Sachs, JP Morgan and Morgan Stanley are among the investment banks invited to pitch for the demerger mandate in recent weeks.

A deal will augment Octopus Energy chief executive Greg Jackson’s paper fortune, and underline his success at building a globally significant British-based company over the last decade.

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Octopus Energy now has 7.5m retail customers in Britain, following its 2022 rescue of the collapsed energy supplier Bulb, and the subsequent acquisition of Shell’s home energy business.

In January, it announced that it had become the country’s biggest supplier – surpassing Centrica-owned British Gas – with a 24% market share.

It also has a further 2.5m customers outside the UK.

Octopus energy wind turbine. Pic suppled by Octopus.
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Kraken is an operating system licensed to other energy providers, water companies and telecoms suppliers. Pic: Octopus

Sources said a £10bn valuation of Kraken would now imply that the whole group, including the retail supply business, was worth in the region of £15bn or more.

That would be double its valuation of just over a year ago, when the company announced that it had secured new backing from funds Galvanize Climate Solutions and Lightrock.

Shortly before that, former US vice president Al Gore’s firm, Generation Investment Management, and the Canada Pension Plan Investment Board increased their stakes in Octopus Energy in a transaction valuing the company at $9bn (£7.2bn).

Kraken is an operating system which is licensed to other energy providers, water companies and telecoms suppliers.

It connects all parts of the energy system, including customer billing and the flexible management of renewable generation and energy devices such as heat pumps and electric vehicle batteries.

The business also unlocks smart grids which enable people to use more renewable energy when there is an abundant supply of it.

In the UK, its platform is licensed to Octopus Energy’s rivals EON and EDF Energy, as well as the water company Severn Trent and broadband provider Cuckoo.

Overseas, Kraken serves Origin Energy in Australia, Japan’s Tokyo Gas and Plentitude in countries including France and Greece.

Its biggest coup came recently, when it struck a deal with National Grid in the US to serve 6.5m customers in New York and Massachusetts.

Sources said other major licensing agreements in the US were expected to be struck in the coming months.

Kraken, which is chaired by Gavin Patterson, the former BT Group chief executive, is now contracted to more than 70m customer accounts globally – putting it easily on track to hit a target of 100m by 2027.

Earlier this year, Mr Jackson said that target now risked being seen as “embarrassingly unambitious”.

Last July, Kraken recruited Amir Orad, a former boss of NICE Actimize, a US-listed provider of enterprise software to global banks and Fortune 500 companies, as its first chief executive.

A demerger of Kraken will trigger speculation about an eventual public market listing of the business.

Its growth in the US, and the relative public market valuations of technology companies in New York and London, may put the UK at a disadvantage when Kraken eventually considers where to list.

One key advantage of demerging Kraken from the rest of Octopus Energy Group would be to remove the perception of a conflict of interest among potential customers of the technology platform.

A source said the unified corporate ownership of both businesses had acted as a deterrent to some energy suppliers.

Kraken has also diversified beyond the energy sector, and earlier this year joined a consortium which was exploring a takeover bid for stricken Thames Water.

This weekend, Octopus Energy declined to comment.

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Ryanair urges EU chief to ‘quit’ over air traffic strike disruption

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Ryanair urges EU chief to 'quit' over air traffic strike disruption

The boss of Ryanair has told Sky News the president of the European Commission should “quit” if she can’t stop disruption caused by repeated French air traffic control strikes.

Michael O’Leary, the group chief executive of Europe’s largest airline by passenger numbers, said in an interview with Business Live that Ursula von der Leyen had failed to get to grips, at an EU level, with interruption to overflights following several recent disputes in France.

The latest action began on Thursday and is due to conclude later today, forcing thousands of flights to be delayed and cancelled through French airspace closures.

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Mr O’Leary told presenter Darren McCaffrey that French domestic flights were given priority during ATC strikes and other nations, including Italy and Greece, had solved the problem through minimum service legislation.

He claimed that the vast majority of flights, cancelled over two days of action that began on Thursday, would have been able to operate under similar rules.

Mr O’Leary said of the EU’s role: “We continue to call on Ursula von der Leyen – why are you not protecting these overflights, why is the single market for air travel being disrupted by a tiny number of French air traffic controllers?

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File photo dated 02/09/22 of a Ryanair Boeing 737-8AS passenger airliner comes in to land at Stansted Airport in Essex. Ryanair has revealed around 63,000 of its passengers saw their flights cancelled during last week's air traffic control failure which caused widespread disruption across the industry and left thousands of passengers stranded overseas. In its August traffic update, the Irish carrier said more than 350 of its flights were cancelled on August 28 and 29 due to the air traffic contr
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Ryanair has cancelled more than 400 flights over two days due to the action in France. File pic: PA

“All we get is a shrug of their shoulders and ‘there’s nothing we can do’. We point out, there is.”

He added: “We are calling on Ursula von der Leyen, who preaches about competitiveness and reforming Europe, if you’re not willing to protect or fix overflights then quit and let somebody more effective do the job.”

The strike is estimated, by the Airlines for Europe lobby group to have led to at least 1,500 cancelled flights, leaving 300,000 travellers unable to make their journeys.

Ryanair chief executive Michael O'Leary speaks to journalists during a press conference at The Alex Hotel in Dublin. Picture date: Thursday October 3, 2024.
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Michael O’Leary believes the EU can take action on competition grounds. Pic: PA

Ryanair itself had axed more than 400 flights so far, Mr O’Leary said. Rival easyJet said on Thursday that it had cancelled 274 services over the two days.

The beginning of July marks the start of the European summer holiday season.

The French civil aviation agency DGAC had already told airlines to cancel 40% of flights covering the three main Paris airports on Friday ahead of the walkout – a dispute over staffing levels and equipment quality.

Mr O’Leary described those safety issues as “nonsense” and said twhile the controllers had a right to strike, they did not have the right to close the sky.

DGAC has warned of delays and further severe disruption heading into the weekend.

Many planes and crews will be out of position.

Mr O’Leary is not alone in expressing his frustration.

The French transport minister Philippe Tabarot has denounced the action and the reasons for it.

“The idea is to disturb as many people as possible,” he said in an interview with CNews.

Passengers are being advised that if your flight is cancelled, the airline must either give you a refund or book you on an alternative flight.

If you have booked a return flight and the outbound leg is cancelled, you can claim the full cost of the return ticket back from your airline.

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CBI kicks off search for successor to ‘saviour’ Soames

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CBI kicks off search for successor to 'saviour' Soames

The CBI has begun a search for a successor to Rupert Soames, its chairman, as it continues its recovery from the crisis which brought it to the brink of collapse in 2023.

Sky News has learnt that the business lobbying group’s nominations committee has engaged headhunters to assist with a hunt for its next corporate figurehead.

Mr Soames, the grandson of Sir Winston Churchill, was recruited by the CBI in late 2023 with the organisation lurching towards insolvency after an exodus of members.

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The group’s handling of a sexual misconduct scandal saw it forced to secure emergency funding from a group of banks, even as it was frozen out of meetings with government ministers.

One prominent CBI member described Mr Soames on Thursday as the group’s “saviour”.

“Without his ability to bring members back, the organisation wouldn’t exist today,” they claimed.

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Rupert Soames
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Rupert Soames. Pic: Reuters

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Mr Soames and Rain Newton-Smith, the CBI chief executive, have partly restored its influence in Whitehall, although many doubt that it will ever be able to credibly reclaim its former status as ‘the voice of British business’.

Its next chair, who is also likely to be drawn from a leading listed company boardroom, will take over from Mr Soames early next year.

Egon Zehnder International is handling the search for the CBI.

“The CBI chair’s term typically runs for two years and Rupert Soames will end his term in early 2026,” a CBI spokesperson said.

“In line with good governance, we have begun the search for a successor to ensure continuity and a smooth transition.”

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