Elaine Watson
Wholesalers could capitalise on the multiples' push towards factory gate pricing by picking up the slack for manufacturers that find it uneconomic to maintain their own fleets, according to a report into the wholesale sector from IGD.
If factory gate pricing gains pace, wholesalers are well placed to pick up goods from suppliers and take them to consolidation centres where smaller volumes are consolidated for collection in full truckloads, says Grocery Wholesaling 2003. "It is here that wholesalers may really find a significant opportunity. There is no reason why wholesalers should not begin to act as consolidation centres for suppliers directed towards factory gate pricing."
Factory gate collections are likely to be in the form of bulk loads of trunkers and full pallets, says the report. "It is likely a significant amount of product made up of smaller volumes will need to be transported, and this could lead to an increase in the amount of consolidation required. Many wholesalers already have all of these elements and those based in the north and the Midlands may already be particularly well placed geographically."
Christopher Adams, chairman of the UK's biggest delivered wholesaler P&H McLane, agreed factory gate pricing could "widen the marketplace" for wholesalers. If 40% of a supplier's distribution is removed through factory gate pricing, the cost of supporting the other 60% goes up, which is where wholesalers come in, said Adams. "As manufacturers' operations are downsized, there will be pressure on smaller retailers to do things in a different way."

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