Out-Law News 1 min. read
Industrial action forcing re-think of UK food supply chain resilience
22 Jan 2025, 3:59 pm
Manufacturers of food and drink in the UK need to think about the resilience of their supply chains and whether over-reliance on one supplier could create a pressured and fragile environment amid increased risk of strikes and other industrial action, experts have said.
The UK has been experiencing a wave of strikes and industrial action across various sectors. These disruptions have highlighted the vulnerabilities within supply chains, with food and drink shortages in particular making the headlines – underscoring the need for robust contingency planning.
Over the last few years, there has been a surge in industrial action, primarily driven by disputes over pay, working conditions, and job security. Sectors affected include transportation, logistics, and port operations – all of which are critical to the smooth functioning of food supply chains.
The reliance on just-in-time delivery systems, while efficient under normal circumstances, has proven to be a significant vulnerability during periods of disruption. This has prompted calls for a re-evaluation of supply chain strategies, including the need for greater resilience and flexibility.
To mitigate the risks of disruption, UK food and drink manufacturers must put plans in place to ensure their supply chains are adaptable under testing conditions.
Neil Black, employment law expert at Pinsent Masons, said: “Over-reliance on one supplier may create a fertile environment for unions to exert pressure on that supplier, given the impact that then has on that fragile supply chain. The impact on the customer, and the knock-on pressure on the supplier to concede to the union’s demands, are less if other sources of supply exist and so the ramifications of the industrial action are reduced and in turn the leverage the union has is weakened.”
Other ways to enhance supply chain resilience may include increasing inventory levels, and investing in technology to improve supply chain visibility, efficiency and overall adaptability.
“Manufacturers should ensure supply chains are resilient by design by utilising multiple sites and having continuity and crisis management plans in place,” said Leo Parkington, commercial law expert at Pinsent Masons.
“From a customer perspective, it is important to ensure that supply arrangements allow for goods or services to be obtained from elsewhere where shortages arise and potentially account for any cost implications,” said Parkington.
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