Kellogg stocks up on Pringles for fear of Brexit
CHICAGO: As Brexit looms, Kellogg Co. and Mondelez International Inc. are taking measures to protect Britons from a potential shortage of Pringles chips, Belvita biscuits and Milka chocolate.
With Britain at risk of leaving the EU on March 29 without a divorce deal, known as a ‘hard’ Brexit, several companies have begun to prepare for the disruption that could ensue. Kellogg is opening new warehouses and stocking up on its snacks and cereals, hoping to mitigate damage from friction at the UK border and tariffs on imports, chief executive Steve Cahillane said in a recent interview.
Kellogg is also working with suppliers to make sure it has enough raw materials at its plants, Cahillane said ahead of CAGNY, a major food and consumer products event held this week in Florida.
“We’re making plans and spending real money to mitigate impact. That’s things like opening new warehouses, building inventory, preparing ourselves in the best possible way,” Cahillane said. He said Kellogg’s supply chain left it exposed. For instance, Pringles, which could last up to 15 months in storage, banked UK retail sales of $342.6 million last year, according to Euromonitor.
Mondelez, meanwhile, is preparing for a ‘soft’ Brexit, hoping that British and European lawmakers come to an agreement.“roughly, we’re expecting interruptions to product flow for three to four weeks,” CEO Dirk Van de Put told on Tuesday on the sidelines of the CAGNY conference.
Reuters