Cold comfort for Walls' UK hauliers
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by Guy Sheppard • Birds Eye Walls (BEW) plans to replace the 27 hauliers which distribute its ice cream across most of the UK with a single firm—possibly F,xel Logistics. KING Management Consulting is completing a feasibility study which could recommend placing all the work with a single contractor. Exel Logistics is the most likely candidate as it already handles deliveries within the M25 and to parts of Norfolk and Cambridge.
The study was commissioned in response to criticism by the Monopolies and Mergers Commission that BEW's distribution practices were anti-competitive because it only paid bonuses to retailers who bought from dedicated distributors, and supplied independent wholesalers on less favourable terms. "We have to make some contractual changes to the way we work with wholesalers," says BEW spokeswoman. "We are not planning to bring our icecream distribution in-house. One of the options is to contract out the distribution system, but we don't have any details yet." One of BEW's 27 contracted hauliers says he has signed a confidentiality clause which bans him from commenting on any changes. But he does confirm that moving to a single haulier could affect around 500 drivers, warehousing and administrative staff.
"We need about five 75 or 10tonne vehicles for every 1,000 shops we deliver to," he adds. BEW has 70% of the market for impulse purchases of ice cream in the UK, so the prospects for alternative work are limited.