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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.”

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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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US-listed Ulta Beauty swoops on high street chain Space NK

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US-listed Ulta Beauty swoops on high street chain Space NK

A New York-listed company with a valuation of more than $21bn is to snap up Space NK, the British high street beauty chain.

Sky News has learnt that Ulta Beauty, which operates close to 1,500 stores, is on the verge of a deal to buy Space NK from existing owner Manzanita Capital.

Ulta Beauty is understood to have registered an acquisition vehicle at Companies House in recent weeks.

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The exact price being paid by Ulta was unclear on Thursday morning, although one source said it was likely to be well in excess of £300m.

Manzanita Capital, a private investment firm, engaged bankers at Raymond James to oversee an auction in April 2024.

The firm has owned Space NK for more than 20 years.

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Manzanita has also owned the French perfume house Diptyque and Susanne Kaufmann, an Austrian luxury skincare brand.

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Founded in 1993 by Nicky Kinnaird, Space NK – which is named after her initials – trades from dozens of stores and employs more than 1,000 people.

It specialises in high-end skincare and cosmetics products.

Manzanita previously explored a sale of Space NK in 2018, hiring Goldman Sachs to handle a strategic review, but opted not to proceed with a deal.

None of Ulta, Manzanita, Space NK and Raymond James could be reached for comment.

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Royal Mail to scrap second-class post on Saturdays and some weekdays

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Royal Mail to scrap second-class post on Saturdays and some weekdays

Royal Mail is to be allowed to scrap Saturday second-class stamp deliveries, under a series of reforms proposed by the communications regulator.

From 28 July, Royal Mail will also be allowed to deliver second-class letters on alternate weekdays, Ofcom said.

The post will still be delivered within three working days of collection from Monday to Friday.

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The proposals had already been raised by Ofcom after a consultation was announced in 2024, and the scale back was proposed early this year.

Royal Mail had repeatedly failed to meet the so-called universal service obligation to deliver post within set periods of time.

Those delivery targets are now being revised downwards.

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Rather than having to have 93% of first-class mail delivered the next day, 90% will be legally allowed.

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The sale of Royal Mail was approved in December

The target for second-class mail deliveries will be lowered from 98.5% to arrive within three working days to 95%.

A review of stamp prices has also been announced by Ofcom amid concerns over affordability, with a consultation set to be launched next year.

It’s good news for Royal Mail and its new owner, the Czech billionaire Daniel Kretinsky. Ofcom estimates the changes will bring savings of between £250m and £425m.

A welcome change?

Unsurprisingly, the company welcomed the announcement.

“It is good news for customers across the UK as it supports the delivery of a reliable, efficient and financially sustainable universal service,” said Martin Seidenberg, the group chief executive of Royal Mail’s parent company, International Distribution Services.

“It follows extensive consultation with thousands of people and businesses to ensure that the postal service better reflects their needs and the realities of how customers send and receive mail today.”

Citizens Advice, however, doubted whether services would improve as a result of the changes.

“Today, Ofcom missed a major opportunity to bring about meaningful change,” said Tom MacInnes, the director of policy at Citizens Advice.

“Pushing ahead with plans to slash services and relax delivery targets in the name of savings won’t automatically make letter deliveries more reliable or improve standards.”

Acknowledging long delays “where letters have taken weeks to arrive”, Ofcom said it set Royal Mail new enforceable targets so 99% of mail has to be delivered no more than two days late.

Changing habits

Less than a third of letters are sent now than 20 years ago, and it is forecast to fall to about a fifth of the letters previously sent.

According to Ofcom research, people want reliability and affordability more than speedy delivery.

Royal Mail has been loss-making in recent years as revenues fell.

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In response to Ofcom’s changes, a government spokesperson said: “The public expects a well-run postal service, with letters arriving on time across the country without it costing the earth. With the way people use postal services having changed, it’s right the regulator has looked at this.

“We now need Royal Mail to work with unions and posties to deliver a service that people expect, and this includes maintaining the principle of one price to send a letter anywhere in the UK”.

Ofcom said it has told Royal Mail to hold regular meetings with consumer bodies and industry groups to hear their experiences implementing the changes.

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

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A pub a day to close this year, industry body warns as it calls for cut to tax burden

An industry body has warned that the equivalent of more than one pub a day is set to close across Great Britain this year.

According to the British Beer and Pub Association (BBPA), an estimated 378 venues will shut down across England, Wales and Scotland.

This would amount to more than 5,600 direct job losses, the industry body warns. It has called for a reduction in the cumulative tax and regulatory burden for the hospitality sector – including cutting business rates and beer duty.

The body – representing members that brew 90% of British beer and own more than 20,000 pubs – said such measures would slow the rate at which bars are closing.

BBPA chief executive Emma McClarkin said that while pubs are trading well, “most of the money that goes into the till goes straight back out in bills and taxes”.

“For many, it’s impossible to make a profit, which all too often leads to pubs turning off the lights for the last time,” she said.

“When a pub closes, it puts people out of a job, deprives communities of their heart and soul, and hurts the local economy.”

She urged the government to “proceed with meaningful business rates reform, mitigate these eye-watering new employment and EPR (extended producer responsibility) costs, and cut beer duty”.

“We’re not asking for special treatment, we just want the sector’s rich potential unleashed,” she added.

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The government has said it plans to reform the current business rates system, saying in March that an interim report on the measure would be published this summer.

From April, relief on property tax – that came in following the COVID-19 pandemic – was cut from 75% to 40%, leading to higher bills for hospitality, retail and leisure businesses.

The rate of employer National Insurance Contributions also rose from 13.8% to 15% that month, and the wage threshold was lowered from £9,100 to £5,000, under measures announced by Rachel Reeves in the October budget.

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