UK snack firms face a Christmas logistics nightmare as packaging workers vote over strike action

Some of Britain’s best-known food and drink brands, including Brewdog, Pepsico, Princes and KP snacks, face a Christmas logistical nightmare as workers vote on strike action.

Nearly 1,000 GMB members at DS Smith, which also make corrugated packaging for Chivas, Diageo and Seabrooks chips, are voting in favor of union action over pay cuts.

Voting closes on November 2, and any strikes are likely to happen later that month.

Workers at five sites – Louth, Lincolnshire, Featherstone, in Yorkshire, Clay Cross, in Derbyshire, Devizes, in Wiltshire and Livingston, in Scotland – are taking part in the vote.

London-based DS Smith has declined an offer of a consolidated increase of 3 percent plus an unconsolidated payment of £760 for 2022 to 2023.

With inflation at 12.3 percent, the deal amounts to a major wage cut in real terms,

Andy Prendergast, GMB’s national secretary, said: ‘DS Smith employees say that the cost of living makes them worse off at £200 a month, through no fault of their own.

“These are the same employees who worked during the pandemic to keep the company afloat.

“Now workers need the company to recognize their efforts with a decent wage offer that will help cope with rising inflation and dazzling energy bills in the coming months, rather than hanging them out to dry.”

“DS Smith can afford to do better.”

On the financial side, DS Smith announced this month that it expects annual profits to be higher than expected, despite declining demand for corrugated boxes.

The company said “very strong” revenue growth and solid cost containment had led to higher profitability.

Adjusted operating profit for the six months ended October 31 is now estimated at at least £400 million, compared to £276 million in the same period last year.

However, since the start of 2022, the company’s stock price has fallen by more than a third as pressures on the cost of living have increased and the pandemic-induced boom in online shopping has abated.

Businesses have increasingly reported a decline or modest increase in e-commerce sales this year, amid an uptick in store purchases due to the absence of Covid-related restrictions

DS Smith told investors early last month that sales of corrugated boxes had fallen slightly in the first quarter.

It also reported that nearly all input costs had risen dramatically, particularly for energy, which has skyrocketed as pandemic-related restrictions have eased and the war in Ukraine has escalated.

To compensate for these higher costs, the group has increased packaging prices and sought to limit the quantities of cardboard used in products.

In addition, the company has covered more than 90 percent of natural gas costs for this fiscal year and approximately 80 percent for the following 12 months.