Connect with us

Published

on

If the trainee truckers the haulage industry so desperately needs could change direction as fast and frequently as government ministers they would sail through the HGV test.

The latest U-turn, executed to address the supply chain crisis, comes from the Department for Transport, and even by the standards of recent weeks it is a screecher.

To try and increase deliveries the government is to waive rules limiting the number of stops European Union drivers can make while in the UK.

Please use Chrome browser for a more accessible video player

Is the supply crisis global?

The regulations, known as “cabotage”, currently limit international drivers to two deliveries in the UK, including the one they enter the country with, in a seven day period.

That’s one fewer than EU drivers can make while working inside the bloc, but the government’s plan is for them to be allowed to make unlimited stops for 14 days, letting them deliver and drop as they see fit.

It comes after the government granted 5,000 short-term visas for British hauliers to hire EU drivers, a move that so far has attracted only a trickle of candidates.

A further 800 seasonal worker places have been agreed for butchers to clear the backlog of pigs on farms.

More from Business

The intention is to address the chronic driver shortage that is affecting every link in the supply chain, from container ports that can’t clear goods to supermarkets trying to fill shelves.

Some in the logistics industry think the cabotage change may make a marginal difference, but the real impact they say will be to disadvantage British drivers and companies.

Please use Chrome browser for a more accessible video player

Why are there supply shortages in UK?

As well as the removal of cabotage restrictions European drivers also face no export checks on arrival in the UK – the government has delayed them until next year – unlike their British counterparts who face full Brexit red tape heading in the other direction.

Coming just days after the prime minister said business could no longer “pull the lever marked uncontrolled immigration”, and should pay higher wages to British workers, the Road Haulage Association (RHA) says it’s closer to “sabotage than cabotage”.

“It’s allowing foreign hauliers who charge low rates, and the lorry drivers who get very small pay packets, to come in and undercut the work that could be done within the UK by British haulage firms,” said Rod McKenzie of the RHA.

It’s estimated around 4-5% of deliveries were made by cabotage before Brexit, a figure that has decreased as the number of European drivers coming to the UK has dried up.

Follow the Daily podcast on Apple Podcasts, Google Podcasts, Spotify, Spreaker

Shane Brennan of the Cold Chain Federation estimates the issue is not even in the top-ten reasons EU drivers are staying away.

“It’s fine as far as it goes and we need all the help we can get, but it’s not going to make a massive difference,” he says.

“The main reason drivers are staying away isn’t cabotage, it’s because of COVID, because of the working conditions, and because there is easier work to be done on the continent.

“You might be able to make a little bit more money by doing a drop from Doncaster to Leeds before you head home, but you need a load to return with, and those have dried up massively because of export checks at the border.

“Why would you risk being stuck at Calais if you don’t need to?

“At the moment it’s as easy as you like to trade with the UK if you are European, and as easy as you like to come in, as long as you don’t work for a British company.”

Continue Reading

Business

Bread producers Hovis and Kingsmill close in on historic merger

Published

on

By

Bread producers Hovis and Kingsmill close in on historic merger

The owners of Hovis and Kingsmill are closing in on a definitive agreement to merge two of Britain’s most famous grocery brands following months of talks.

Sky News has learnt Associated British Foods (ABF), the London-listed company which owns Kingsmill’s immediate parent, Allied Bakeries, has proposed paying roughly £75m to acquire Hovis from its long-term private equity backers.

Banking sources said a deal could be formally agreed to combine the businesses as early as the end of next week, although they cautioned the complexity of the transaction meant the timing could yet slip.

Confirmation of a tie-up would come nearly three months after Sky News revealed ABF and Endless – Hovis’s owner since 2020 – were in discussions.

Industry sources have estimated that a combined group could benefit from up to £50m of annual cost savings from a merger.

ABF has also been exploring options for the future of Allied Bakeries separate from its talks with Hovis in the event a deal could not be agreed or is prevented from completing by competition regulators.

If it does go ahead, the merger will unite two historic bread producers under common ownership, with Allied Bakeries having been founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF.

More from Money

Hovis traces its history back even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning “strength of man”.

Persistent inflation, competition from speciality bread producers and shifting consumer habits towards lower-carb diets have combined to impair breadmakers’ financial health in recent decades, however.

In accounts filed at Companies House earlier this month, Hovis said it had “achieved positive financial progress despite continued tough trading conditions”.

The company reported sales of £439.6m in the 52 weeks to 28 September last year, down from £477.6m in the 53 weeks to 30 September 2023.

Earnings before interest, tax, depreciation and amortisation fell from £20.9m to £18.7m, which Hovis said was the result of the revenue decline and higher distribution costs.

“Overall bread share remained stable, despite significant price inflation and the ongoing cost-of-living crisis, demonstrating the resilience of the Hovis brand and its iconic status as one of Britain’s most loved food brands,” the accounts said.

This week, the trade publication The Grocer reported that Britain’s big four supermarkets, including Asda and Sainsbury’s, had delisted a number of Hovis-branded products.

The publication quoted a Hovis spokeswoman as saying the company was “aware of some adjustments to Hovis product lines in certain stores”.

“We remain fully committed to working collaboratively with our retail partners to grow our mutual businesses.”

The overall UK bakery market is estimated to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day.

Critical to the prospects of a merger of Allied Bakeries, which also owns the Sunblest and Allinson’s bread brands, and Hovis taking place will be the view of the Competition and Markets Authority (CMA) at a time when economic regulators are under intense pressure from the government to support growth.

Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector, with Hovis on 24% and Allied on 17%, according to industry insiders.

A merger of Hovis and Kingsmill would give the combined group the largest share of that segment of the market, although one source said Warburtons’ overall turnover would remain higher because of the breadth of its product range.

Responding to Sky News’ report in May of the talks, ABF said: “Allied Bakeries continues to face a very challenging market.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value.”

In a separate presentation to analysts, ABF – which is also in the process of closing its Vivergo bioethanol plant in Hull after pleading for government support – described the losses at Allied, which also owns own-label bread manufacturer Speedibake, as unsustainable.

The company does not disclose details of Allied Bakeries’ financial performance.

Prior to its ownership by Endless, Hovis was owned by Mr Kipling-maker Premier Foods and the Gores family.

At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites, as well as its own flour mill.

Hovis’s current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.

This weekend, ABF declined to comment, while Endless could not be reached for comment.

Continue Reading

Business

Good economic news as sunny weather boosted retail sales

Published

on

By

Good economic news as sunny weather boosted retail sales

Retail sales grew in June as warm weather boosted spending and day trips, official figures show.

Spending on goods such as food, clothes and household items rose 0.9%, the Office for National Statistics (ONS) said.

It’s a bounce back from the 2.8% dip in May, but last month’s figure was below economists’ forecast 1.2% uplift as consumers dealt with higher prices from increased inflation.

Money blog: The odd rules that could land you with a big fine on holiday

Also weighing on spending was reduced consumer confidence amid talk of higher taxes, according to a closely watched indicator from market research firm GfK.

Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.

Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.

More on Retail

Please use Chrome browser for a more accessible video player

What does ‘inflation is rising’ mean?

Where have people been shopping?

June’s retail sales rise came as people bought more in supermarkets, and retailers said drinks sales were up.

While hot and sunny weather boosted some brick-and-mortar shops, the heat led some to head online.

Read more from Money:
Satellite tracker Spaceflux reaches lift-off with £5m funding boost
Trade war uncertainty prompts halt to eurozone rate cuts

Non-store retailers, which include mainly online shops, but also market stalls, had sold the most in more than three years.

Not since February 2022 had sales been so high as the Met Office said England had its warmest ever June, and the second warmest for the UK as a whole.

The June increases suggest that the May drop was a bump in the road. When looked at as a whole, the first six months of the year saw retail sales up 1.7%.

Filling up the car for day trips to take advantage of the sun played an important role in the retail sales growth.

When fuel is excluded, the rise was smaller, just 0.6%.

Welcome news

Despite lower consumer sentiment and more expensive goods, consumers are benefitting from rising wages and are cutting back on savings.

The ONS lifestyle survey – backed up by hard data like the Bank of England’s money and credit figures – shows that households have rebuilt their rainy day savings and are cutting back on the amount of money they squirrel away each month.

Continue Reading

Business

Former Poundland owner lines up advisers as restructuring looms

Published

on

By

Former Poundland owner lines up advisers as restructuring looms

The former owner of Poundland is lining up advisers to supervise its transition to new shareholders through a court-sanctioned process that will involve store closures and job cuts at the discount retailer.

Sky News has learnt that Pepco Group, which is listed on the Warsaw Stock Exchange, is drafting in FRP Advisory weeks after it struck a deal to sell Poundland to Gordon Brothers.

Industry sources said FRP had been asked by Pepco to act as an observer, with the High Court scheduled to sanction a restructuring plan in the last week of August.

Under the proposed deal, 68 Poundland shops would close in the short term, along with two distribution centres.

More shops are expected to be shut under Gordon Brothers over time, resulting in hundreds of job losses.

Pepco is said to be particularly focused on IT systems which Poundland uses in common with Pepco’s operations in Poland.

Barry Williams, managing director of Poundland, said at the time of the deal’s announcement: “It’s no secret that we have much work to do to get Poundland back on track.

More from Money

“While Poundland remains a strong brand, serving 20 million-plus shoppers each year, our performance for a significant period has fallen short of our high standards and action is needed to enable the business to return to growth.

“It’s sincerely regrettable that this plan includes the closure of stores and distribution centres, but it’s necessary if we’re to achieve our goal of securing the future of thousands of jobs and hundreds of stores.

Prior to the deal’s announcement, Poundland employed roughly 16,000 people across an estate of over 800 shops in the UK and Ireland.

Tax hikes announced by Rachel Reeves, the chancellor, in last autumn’s Budget have increased the financial pressure on high street retailers.

In recent months, chains including WH Smith, Lakeland and The Original Factory Shop have changed hands amid challenging circumstances.

In June, Sky News revealed that River Island, the family-owned clothing retailer, was also working with advisers on a rescue plan aimed at averting its collapse.

Pepco and Poundland declined to comment.

Continue Reading

Trending