This website uses cookies primarily for visitor analytics. Certain pages will ask you to fill in contact details to receive additional information. On these pages you have the option of having the site log your details for future visits. Indicating you want the site to remember your details will place a cookie on your device. To view our full cookie policy, please click here. You can also view it at any time by going to our Contact Us page.

FDF responds to Plimsoll report on small food companies

07 June 2010

Plimsoll says 54 small food processors are in financial difficulty as the credit crunch lingers. But the Food & Drink Federation says the sector has weathered the storm better than most.

According to market analysts Plimsoll and their new report on conditions in the Food Processors industry, smaller companies have not had the same facilities to ride out the recession as well as their larger counterparts.

David Pattison, author of the Plimsoll Analysis – Food Processors explains, “While large companies have relied on their size, brands and better access to cash, smaller companies have been left high and dry”.

He continues, “We've given 54 small companies a Danger rating. While conditions have improved of late, I fear a high proportion will fail. Whereas large companies can call on banks and parent companies or cut out loss making parts of their operations, smaller companies are increasingly running out of cash”.

Pattison also points out how small companies are struggling to maintain their market share and being squeezed out of the market: “98 small companies are selling less than last year. Clearly they have seen demand for their products dip or worse still, a new competitor has emerged. With their finances already stretched, they have little left in their arsenal to fight back”.

So what next for these small companies? Pattison says, “There are clearly too many small companies chasing too little market. The inevitable consequence is another round of consolidation with large competitors buying small companies at a discount. Of the 217 companies with assets of less than £3million, we have identified 96 companies as being vulnerable to takeover”.

But the Food & Drink Federation (FDF) said the situation wasn't as dire as it could be.

“As the UK’s largest manufacturing industry, the food and drink sector can act as a valuable stabilising force at times of economic uncertainty and our members, of all sizes, have clearly weathered the storm better than most,'' the FDF told FP Express. “In fact, official Government statistics show that our sector, compared with other manufacturing industries, reduced its output the least and has already returned to pre-recession output levels(1). In addition, food and drink companies have continued to exploit the potential of export markets – with overseas sales hitting record levels last year(2).

“Like other business sectors, however, we are expecting overall UK economic growth to be sluggish over the course of 2010. Consumers and businesses will remain pretty cautious in the year ahead and we tend to agree with forecasters who fear we will have to wait until 2012 before the level of economic activity gets back to where it was before the recession started.

“Against that uncertain backdrop, we are keen to work with the new coalition to ensure that our sector can continue to compete and prosper, with a strong emphasis on the needs of smaller businesses. In particular, FDF will continue to urge Government to remove any unnecessary red tape and regulation which will limit the ability of SME companies to expand; support efforts to get banks lending again; and have backed the creation of a supermarket Ombudsman.”

*Readers of Food Processing are entitled to a £50 discount of this new special edition of the Plimsoll Industry Analysis – Food Processors. Call 01642 626400 for further details and quote reference PR/FI38.

1 Office for National Statistics: Index of Production data: http://www.statistics.gov.uk/cci/nugget.asp?id=198
2 UK Food and Drink Export Performance 2009: http://www.fdf.org.uk/exports/ukexports.aspx



Contact Details and Archive...

Print this page | E-mail this page

RELATED CONTENT...


Article image Multimillion pound biogas plant opens in North East

A new £8million food waste plant has opened in County Durham in a bid to serve the North East’s need to recycle food waste and create renewable energy.Full Story...

FDF: a return to growth for food and drink exports

The Food and Drink Federation (FDF) today reported that in the first half of 2013, total UK food and non-alcoholic drink exports grew by more than 2 per cent to more than 6.1 billion pounds.Full Story...

UK's only beverage carton recycling plant opens for business

Celebrity food expert to speak at Food Processing Awards

British produced food would only last until August

RELATED SPONSORED ARTICLES...


Article image Automatic effluent sampling part of Patak’s push for environmental perfection

Aquamatic Ltd, leading UK manufacturer of automatic wastewater sampling equipment, have supplied an outdoor, temperature-controlled, MCERTs Certified waste water sampler system to Patak’s Foods, where it is being used to help monitor effective effluent treatment through Patak’s recently installed Dissolved Air Flotation (DAF) plant.Full Story...

Article image Food for thought: What goes into building an Olympic Park?

New data shows what went into building the Olympic Park. Around 46,000 construction workers helped build the Olympic Park and Village for London 2012. That’s a lot of builders’ tums. And when a cheese and pickle sarnie just wasn’t enough, those builders needed a Boost. 7,000 of them, in fact. Every month.Full Story...

MOST VIEWED...


Article image Spray and save on the glazing process

Food glazes are widely used in the bakery sector to improve the look and taste of baked products. Traditionally, this coating process has resulted in substantial waste. Technology advances mean that this is no longer the case. Full Story...

Article image Your flexible friend in the food factory

Suzanne Gill finds out where thermal imaging technology can help around the factory. Full Story...

What role does refrigeration play in the supply chain?

A dry-ageing process improvement

Self diagnostics: an enabler for predictive maintenance

http://www.appetite4eng.co.uk