£3bn of food and drink stuck in UK warehouses due to supply chain delays

By Michelle Perrett

- Last updated on GMT

The food and drink has £3bn of product in warehouses
The food and drink has £3bn of product in warehouses

Related tags Supply chain

£3bn of food and drink is awaiting completion in UK manufacturers’ warehouses because of supply chain delays, according to a new report.

The report from Barclays Corporate Banking revealed that the most affected consumer goods sector is food and drink, with delays in sourcing ingredients causing the £3bn backlog. 

The study – ‘Chain reaction’​ – focuses on all manufacturing businesses with over ten employees and looks at the impact of supply chain issues. It found that goods with a total value of £23.6bn are awaiting completion across all sectors. Seven in ten (72%) businesses across all sectors are currently holding items in their warehouses awaiting completion because raw materials, ingredients or component parts have not yet been delivered from suppliers.

Materials 

The Barclays’ research revealed that a third of food manufacturers struggle with the availability of materials, as the Ukraine war continues to limit supply of critical ingredients such as wheat and sunflower oil. Availability is also a severe problem in sectors such as electronics (39%) and aerospace (44%).

Supply blockages are most common from domestic sources – 32% have issues with suppliers in the UK. 

The report also found that in terms of numbers, food and drink producers have the biggest recruitment target, with 71,500 vacancies. It also revealed that 57% of food & drink companies were finding themselves squeezed between buyers seeking longer credit, and suppliers who are keen for faster payment. 

Ease the pressure

However, food and drink producers are working closely with their clients to ease the pressures, with growing recognition by the big supermarkets of the price pressures facing manufacturers. 

Lee Collinson, Head of Manufacturing, Transport and Logistics for Barclays Corporate Banking, said: “The British manufacturing sector has faced a perfect storm of challenges this year, with rising costs, the war in Ukraine, labour shortages and ongoing Covid lockdowns in China hitting supply chains hard. As a result, billions of pounds worth of goods are trapped in warehouses unfinished, and this may hit industry turnover in the early part of next year.

He added: “However, manufacturing firms have done what they do best and engineered new solutions to limit the impact of the issues they face. As a result, many businesses will enter the new year with a degree of cautious optimism and confidence.”

Related topics Supply Chain

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