Single supplies 'need good risk management'

British Airways' problems with Gate Gourmet serve as a warning to firms relying on single suppliers that they need good business continuity plans to fall back on when things go wrong, risk management experts have warned.

As Food Manufacture​ went to press, Gate Gourmet, which supplies BA with 80,000 meals a day, was threatening to call in administrators unless it secured a new deal with the airline. BA had said a new contract was conditional on Gate Gourmet resolving its labour dispute following the sacking of 667 employees.

Peter Jackson, md at the consumer products group of risk manager Aon, said: "I don't think that this is a cautionary tale about outsourcing or sole suppliers per se. The issue in contracts like this is whether both parties have a plan B when things go wrong. You have to build contingency plans into contracts at the planning stage, looking at whether you can spread business across two or three other suppliers at short notice, looking at what capacity is available and so on."

LSG Sky Chefs, another airline meals supplier, said BA's deal with Gate Gourmet was not unusual; all the big US carriers and many European ones had single suppliers.