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.
Image: 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.
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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.”
Image: 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.”
The CBI is urging members to swallow a further rise in fees even as the lobby group battles to regain its former standing among political and business leaders.
Sky News understands that CBI members will be asked at its annual meeting next week to approve a 5% rise in their subscription costs.
It comes less than three months after the organisation – which styles itself as ‘the voice of British business’ – won a lifeline from banks which agreed to provide sufficient funding to avert collapse in the aftermath of a sexual misconduct scandal.
The CBI has been slowly rebuilding its reputation, staging a slimmed-down version of its annual conference last month which featured an address by Jeremy Hunt, the chancellor.
In a circular to members, it said the fee hike was in line with previous years.
However, the group has been slashing costs by axeing a chunk of its workforce and closing most of its overseas offices in an attempt to restore its finances to a more stable footing.
The crisis which erupted earlier this year, which followed several rape allegations against former employees, triggered an exodus of corporate members including Aviva and John Lewis Partnership.
Tony Danker, its director-general – who was accused of inappropriate behaviour but had nothing to do with the more serious allegations – stepped down in April weeks after being suspended.
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The CBI briefly entertained talks about a merger with Make UK, the manufacturers’ body, but these have now been curtailed.
The business group declined to comment on Friday, although an insider said it was “standard operating practice…to adjust prices for inflation”.
The government is to prohibit the removal or transfer of key Daily Telegraph journalists during a public interest probe into the newspaper’s prospective takeover by a state-backed Abu Dhabi investor.
Sky News has learnt that Lucy Frazer, the culture secretary, is preparing to make an interim enforcement order (IEO) that will impose a set of restrictions on the Daily and Sunday Telegraph’s current owners.
City sources said the IEO – which has been notified to the Barclay family – was likely to be made public later on Friday.
Both the family and RedBird IMI are said to have agreed to the restrictions.
It will come within hours of the government issuing a Public Interest Intervention Notice (PIIN) that will subject the change of control at the broadsheet titles to a probe by Ofcom and the Competition and Markets Authority.
The IEO will prevent the Barclay family or RedBird IMI from expediting a further change of ownership, removing directors or transferring top editorial staff without the secretary of state’s approval, according to one insider.
Image: Culture Secretary Lucy Frazer
Whitehall officials had been considering using a separate order to ensure the newspapers’ independence during the PIIN, but sources said the IEO would effectively achieve the same objectives.
News of the IEO may assuage concerns raised by a growing number of Conservative parliamentarians about the Barclay family, which has owned the Telegraph since 2004, or RedBird IMI attempting to exert renewed influence on the newspapers.
Ms Frazer is seeking the regulators’ responses before the end of January, after which the takeover of the broadsheet newspapers could be approved or blocked.
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Dozens of Conservative MPs, including the former party leader Sir Iain Duncan Smith, have called for the deal to face further investigation under national security laws.
The repayment of a £1.16bn debt to Lloyds is, however, unaffected by the PIIN.
Earlier on Friday, Sky News revealed that shareholders in Lloyds Banking Group could reap a windfall worth more than £500m early next year following the deal to repay the loans.
Lloyds is expected to receive the funds early next week from the Barclays following an agreement between the family and RedBird IMI, an Abu Dhabi-based vehicle which is majority-funded by members of the Gulf state’s royal family.
RedBird IMI plans to convert a £600m chunk of the loan into shares in the Telegraph newspapers and The Spectator magazine if it gains regulatory approval for the deal.
RedBird IMI, which is fronted by the former CNN president Jeff Zucker and funded in large part by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, has pledged to preserve the Telegraph’s editorial independence.
A trio of independent directors, led by the Openreach chairman Mike McTighe, will remain in place while the public interest inquiry is carried out.
RedBird IMI’s move to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.
Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall had been agitating for the launch of a PIIN.
The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, is now effectively over.
Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.
Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.
The DCMS and a spokesman for the Barclay family declined to comment.
Shareholders in Lloyds Banking Group could reap a windfall worth more than £500m early next year following a deal that will see it repaid loans in full by the owners of The Daily Telegraph.
Sky News has learnt Britain’s biggest high street lender will be in a position to write back more than £500m on the value of a £700m loan extended years ago to the Barclay family.
One banking analyst said the writeback, the precise size of which will be disclosed in Lloyds’ annual results next February, would pave the way for Lloyds to return a significant amount of capital to investors, potentially through a special dividend or share buyback.
Lloyds is expected to receive a total of £1.16bn early next week from the Barclays following an agreement between the family and RedBird IMI, an Abu Dhabi-based vehicle which is majority-funded by members of the Gulf state’s royal family.
RedBird IMI plans to convert a £600m chunk of the loan into shares in the Telegraph newspapers and The Spectator magazine if it gains regulatory approval for the deal.
On Thursday, Lucy Frazer, the culture secretary, confirmed a Sky News report that she was issuing a Public Interest Intervention Notice (PIIN) that will subject the transaction to scrutiny by Ofcom and the Competition and Markets Authority.
Ms Frazer is seeking the regulators’ responses before the end of January, after which the takeover of the broadsheet newspapers could be approved or blocked.
Image: A newsagent carries a pile of Daily Telegraph newspapers
Dozens of Conservative MPs, including the former party leader Sir Iain Duncan Smith, have called for the deal to face further investigation under national security laws.
The debt repayment to Lloyds is, however, unaffected by the PIIN.
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The bank has already given notice to the government of the debt repayment, with the funds expected to be transferred early next week.
The outcome will be a stunning one for Lloyds and its chief executive Charlie Nunn, who had rejected a series of partial repayment offers from the family lodged after the Telegraph’s holding company was placed into receivership during the summer.
In addition to the £700m value of the principal loan, the Barclays are paying more than £400m in interest which has accrued over many years.
“The writeback is pure profit for Lloyds and will flow straight to the bank’s bottom line,” the analyst said.
One person close to the situation said that Lloyds had written down the majority, but not all, of the loan’s original £700m value.
A writeback of over £500m is therefore expected to contribute a meaningful proportion of the bank’s 2023 annual profit.
Analysts say the company is already generating significant sums of excess capital and that the absence of a substantial acquisition would therefore give Lloyds’ board the freedom to return the Telegraph loan windfall to shareholders.
RedBird IMI, which is fronted by the former CNN president Jeff Zucker and funded in large part by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City, has pledged to preserve the Telegraph’s editorial independence.
The repayment of the Lloyds loan will trigger the dissolution of a court hearing in the British Virgin Islands to liquidate a Barclay company tied to the newspaper’s ownership, and temporarily put the family back in control of their shares in the broadsheet title.
However, the Barclays will be subject to restrictions imposed by the government which are expected to be outlined shortly.
A trio of independent directors, led by the Openreach chairman Mike McTighe, will remain in place while a public interest inquiry is carried out.
RedBird IMI’s move to fund the loan redemption has circumvented an auction of the Telegraph titles which has drawn interest from a range of bidders.#
The battle for control of The Daily Telegraph has rapidly turned into a complex commercial and political row which has raised tensions between the DCMS and the Foreign Office over Britain’s receptiveness to foreign investment.
Prospective bidders led by the hedge fund billionaire and GB News shareholder Sir Paul Marshall had been agitating for the launch of a PIIN.
Sky News revealed recently that Ed Richards, the former boss of media regulator Ofcom, is acting as a lobbyist for RedBird IMI through Flint Global, which was co-founded by Sir Simon Fraser, former Foreign Office permanent secretary.
The Telegraph auction, which has also drawn interest from the Daily Mail proprietor Lord Rothermere and National World, a London-listed local newspaper publisher, has now been paused until next month.
The original bid deadline had been shifted from 28 November to 10 December to take account of the possibility that Lloyds might be repaid in full by the Barclay family by December 1.
That bid deadline is now expected to be cancelled.
Until June, the newspapers were chaired by Aidan Barclay – the nephew of Sir Frederick Barclay, the octogenarian who along with his late twin Sir David engineered the takeover of the Telegraph in 2004.
Lloyds had been locked in talks with the Barclays for years about refinancing loans made to them by HBOS prior to that bank’s rescue during the 2008 banking crisis.
A Lloyds spokesman indicated that any capital distributions would be evaluated in the usual way by its board ahead of the bank’s annual results, but declined to comment further.