Orders falling short as supply issues bite

Driver shortage could impact on sector for much of the next year, says wholesale group

SUPPLY chain issues across the UK, including delivery driver shortages, are causing some pubs to have their beer orders cancelled or to receive deliveries that “fall short by around 75%”, according to trade group the Scottish Licensed Trade Association (SLTA).

The SLTA has warned that the driver shortage, which could be exacerbated by upcoming strike action, has placed “another hurdle” in the way of the sector’s recovery. Drivers at logistics company GXO Logistics Drinks are due to strike on 24th August and again on 2nd September.

“SLTA members are already reporting delays and cancellations of orders placed with brewers and other supply chain operators and, in some instances, beer orders that have been delivered fall short by around 75%,” said SLTA managing director, Colin Wilkinson.

“In many cases packaged goods are not being delivered and we have reports of pub and bar owners travelling the length of the country to source supplies.
“We have also heard reports of the selective supply of goods by some companies only servicing certain sections of their customer base.”

He added that an expected CO2 and Nitrogen shortage could further impact the industry.

Colin Smith, chief executive of the Scottish Wholesale Association, said a recent survey of the association’s members revealed a 13% shortfall in drivers across the sector.

“The shortage is likely to continue for between 12 and 18 months while new drivers are trained and that pool comes onto the market,” said Smith.

“The shortage isn’t just about those employed within wholesale itself but the supply chain that feeds us and which is a much bigger problem.”

Smith attributed the driver shortage to Brexit, with EU nationals having accounted “for about 35% of our driving workforce”.

However, there are also issues with the availability of products, which he attributed to a range of causes including a lack of ingredients, increased shipping costs and paperwork issues around imports from the EU as well as issues caused by COVID.

Price increases will be inevitable, he said.

“Price increases are already being seen with 90% of all respondents to our survey reporting price increases coming through from their suppliers but only 62% of those respondents currently passing those increase through to their customers,” said Smith.

“This, however, is not sustainable and wholesalers will be unable to absorb those costs indefinitely, especially when our sector is running, on average, net margins of only 1.3%.”