Food and Drink manufacturers of all sizes continue to fight a relentless battle to maintain competitiveness.
Major retailers continue to apply increasing pressure upon suppliers in response to their own diminishing sales at the hands of the discounters. Indeed, the Groceries Code Adjudicator is currently investigating one major retailer over alleged late payments to suppliers and additional charges imposed for enhancements to product positioning.
Although this is potentially embarrassing for the retailer concerned, it’s unlikely to offer much by way of comfort to beleaguered suppliers. They continue to face an onslaught of increasing legislation, lengthy governmental posturing over such issues as health and well-being and, of course, the on-going threat of losing business to competitors – long after this latest episode has been forgotten.
Just as retailers continually seek best value from their suppliers, it makes perfect sense for producers to ensure their own costs are also regularly challenged. Insurance-related costs (like other non-productive expenses) impact upon competitiveness, and should remain a regular area of focus for all businesses.
Most food producers would agree that buying decent business insurance cover is essential – in fact, most banks, investors and even customers will usually insist upon it!
But how do you ensure you’re getting the best value? Are you comfortable you’re currently buying the right type of cover to protect your business effectively? How effective are the risk management services you currently purchase, and do you consider them to offer good value for money?
You should look confidently to your broker for guidance and advice around managing and controlling risk, and systematically reducing insurance costs. We believe there are five key areas where food and drink businesses can not only look to secure tangible and immediate cost savings, but also achieve significant improvements to the quality of their risk and insurance programmes
How can we help?
If you would like to discuss any of the points from our guide in greater detail, or indeed any other matter, please call Ian Edwards on 0121 698 8091 or email firstname.lastname@example.org
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Product Contamination and Supply Chain insurance needs to be a serious consideration for food suppliers in case the worst should happen.
The UK suffered over 1,600 food incidents in 2012* as highlighted by the Food Standards Agency (FSA) annual report, down by over 6% on the preceding year (1,714 incidents), which is clearly positive news. The agency’s next report for 2013, which is to be published in June, will be greeted with particular interest due to the horse meat scandal which erupted earlier that year.
“High level” cases highlighted in the last FSA report included, fraudulent exports of fish by-products and peanut butter contaminated with salmonella. Thankfully high risk incidents such as these remain low; with only six such cases reported in 2012.
The consequences of a product recall can be severe, not only from a financial perspective but the long term damage to brand and reputation can be as equally devastating.
Despite such risks many still view the need to protect their business with Product Contamination and Supply Chain insurance as a luxury rather than a necessity.
The ongoing prevention of product contamination of course needs to remain the top priority for suppliers; however they should be aware that insurance cover, offering financial and crisis containment support, is a cost effective, viable option.
How can we help?
Perkins Slade has more than 40 years’ experience in providing expert insurance and risk management advice for UK and international businesses.
To ensure you have a full understanding of the extent and limitations of Product Contamination and Supply Chain insurance please contact your usual Perkins Slade representative. Alternatively you can contact Ian Edwards, Corporate Account Executive email@example.com or call him on 0121 698 8091.
*Source: FSA Annual Report of Incidents 2012.
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