A chronic shortage of self-adhesive labels risks causing supply chain disruption which could see a repeat of that sparked by the CO2 crisis, industry leaders have warned.
Ongoing strike action by workers at the UPM paper mills in Finland, combined with existing market shortages of paper, have led to predictions of a major impact on a raft of products, including thousands of fresh food products and soft drinks.
UPM supplies paper for two of the three main label printing operations in the UK, as well as other label operations across Europe, and with the strike currently set to last until April, sources told The Grocer disruption is “inevitable” and that it will take weeks and maybe months for supplies to return to normal.
As well as food suppliers, Amazon is said to be on high alert over the potential disruption to deliveries.
The Grocer understands bodies including the FDF and British Plastic Federation have held talks with Defra in the past few days to stress the urgency of the situation, but were told there are limits to what the UK government can do to intervene.
A source said: “The real danger is that even if this strike ended tomorrow, and it doesn’t look like it will, this is going to take weeks before the supply chain comes back to normal.
“It’s inevitably going to have an impact on supply chains, as without labels you simply cannot package products including food. There are already delays but food manufactures are concerned this will get worse and show itself in shortages in the coming weeks.”
Shortages of food-grade CO2 almost brought the food sector to its knees in the summer of 2018, when a series of factory closures halted production of the gas, disrupting supply of beer, soft drinks, crumpets, pigs and poultry.
The source added: “That happened because the people producing CO2 were saying it was not economical, so they stopped production and the same thing is at the heart of the UPM strike.”
Charles Jarrold, CEO of printing body the BPIF, said: “A shortage of paper is a grave threat to our supply chains and ultimately to the products available for customers. Without labels, packaged goods cannot come to market and consumers will suffer the loss of many everyday items – foods, drinks and medicines to name a few key areas.”
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