Maltsters say ‘Supply Chain Collaboration more important than ever’
Addressing the Annual meeting of the MAGB (Maltsters Association of Great Britain), Vice-Chairman Steven Rowley reflected on the turbulent business environment in which the malting barley supply chain is operating. Dramatic changes in interest rates, exchange rates, energy prices and cereal prices have combined to raise uncertainty and risk, to the great concern of maltsters and their partners in the supply chain.
Distillers face the long-term uncertainty of the length of the recession globally; UK brewers are suffering acutely from a downturn in sales, fuelled by swingeing increases in beer duty and the decline in popularity of the pub. Growers would be happier with stable cereal prices that would allow for future planning.
Mr Rowley continued to say that in such times it is important for the supply chain to focus on the crucial issues, and security of supply ranks highest amongst these. Maltsters believe that each link in the supply chain needs such security, and that medium-term commitment to partnerships is key to reducing the long-term risk of failure of supply.
Mr Rowley also looked at specific sector threats which are in addition to the financial risks that affect the sector, including
- the review of the pesticides directive by the EU, by which the European Parliament may unwittingly cause sharply higher food prices, including malt and malting barley, and possibly even food shortages
- the introduction of limits for additional mycotoxins during 2009, which may reduce the tonnes of barley available for malting
- the review of Climate Change Agreements for the extension period to 2014, with a possible absolute cap on carbon emissions by sites, which would stop any potential for the industry to supply additional tonnes into the export market
- the transfer of the Levy Board activities from the home of HGCA in London to the new home in Stoneleigh, with consequent loss of experienced staff during 2009.
He particularly paid tribute to the work of HGCA and hoped for a smooth transition to the new organisation on the new site
On the positive side, Mr Rowley reflected on a large harvest of good quality barley in 2008, continuing growth in global demand for beer, reinvestment in plant capacity by UK maltsters, and an excellent ongoing communication network that moves the supply chain forward together, allowing a conclusion that “as a sector we remain optimistic but this optimism must be hedged with a suitable measure of caution”.
