The Sunday Telegraph - Business & Money
Chips down as fry bag shortage hits Burger King
FAST-FOOD chains are facing the prospect of chip bag shortages ahead of the busy half-term break.
Burger King is understood to be grappling with a shortage of fry bags in the latest sign of supply chain woes. Until recently, the chain had been experiencing shortages of plastic cup lids.
Burger King is working on various measures to ensure the latest supply shortage does not hit orders, sources said, including swapping in unbranded fry bags and using different-sized bags.
Earlier this year Mcdonald’s ran out of milkshakes and bottled drinks at some of its restaurants. It said at the time that a “nationwide shortage of HGV drivers” was partly to blame.
Half-term is traditionally a busy period for fast-food companies as families visit drive-throughs on long journeys and footfall in city centre sites is boosted by higher lunchtime trade. Burger King did not respond to requests for comment.
Trouble sourcing packaging is something that has rippled across the UK, with industry group Ukhospitality saying last week that higher energy prices meant boxes and wrap were becoming harder to source. Factories are having to rein in production to cope with the high costs.
Kate Nicholls, chief executive of Ukhospitality, said: “That means food supply grinds to a halt rapidly if we cannot pack and protect food.”
Paper is among the most used materials in packaging, and has been one of the industries hardest hit by high energy prices, brought about by spiralling wholesale gas prices. While Ofgem sets price caps for energy for consumers, there is no such cap for industries.
Last week, paper bosses warned factories could have to close if energy prices continued to rise. Britain’s biggest producer of newsprint Palm Paper, meanwhile, was reportedly looking at cutting its production this year, with Bloomberg saying the group had not sufficiently hedged its gas purchases.
Kwasi Kwarteng, the Business Secretary, has put forward proposals to the Treasury to provide temporary subsidies for paper companies, as well as for steel, glass and ceramic firms.
Factories have been struggling with a tight labour market, competing for workers against retailers and restaurants, which are also recruiting.