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Aid to Russia and break-away states could cut food mountain down in size.

Aid to Russia and Break-Away States Could Cut Food Mountain Down in Size

Will food assistance to the Soviet Union (or whatever that independence-minded and politically evolving group of nations may be called by the time this article is published) shrink the rising mountain of surplus commodities in the warehouses of Great Britain and Europe?

Prime Minister John Major reportedly wants to send the Russians beef and butter. But unlike Alaska, which has shipped some of its pink salmon glut to the fast-fading reds (see story on page 56), it doesn't appear that the UK will be packing off its high-priced fish stocks.

As with the Alaskans, Britain's generosity may not be altogether altruistic. But the food will nonetheless be thankfully received in the Soviet republics just the same. In Alaska an abundance of salmon was dropping prices to dangerously low levels, threatening the fishing industry. The oversupply situation in Britain was explained to Quick Frozen Foods International this way by an industry analyst:

"The beef mountain is growing because people are still afraid that homegrown meat is tainted with bovine spongiform encephalitis (mad cow disease). And the excess butter is a perennial problem due to misguided agricultural policy across the EEC. As for the fish and shellfish, stocks are rising because of the natural law of supply and demand - consumers are simply refusing to pay high prices."

With all the government-subsidized product stacking up, isn't this easy money for coldstore operators? If the truth be known, a lot of warehousemen in Britain would just as soon get out of the intervention business, which is far from lucrative these days.

"We don't have a stick of intervention stock on hand," advised Ian Lister, managing director of West Kent Cold Storage. "When the price is right, we'll address that market again. But as for now, we're out."

Generally speaking, pallet position rates have risen from about 1.50 [pounds] per week last year to between 2 [pounds] and 2.50 [pounds] now, according to Ken Oliver of Link 51, a supplier of storage products that closely monitors the warehousing sector. Facilities are relatively short of space, he said, as more operators have committed themselves to leasing premises to third parties. Such arrangements guarantee stable business levels for the midterm.

Situated in Dunton Green, West Kent Cold Storage is one such operation. Some 75% of the facility's 3.5 million cubic feet of storage space is rented to clients who run the frozen and chilled foods gamut. Among the clients are German-owned institutional market specialist Apetito, meat packer JD&D Limited, and catering distributor Pullman Foods.

Boasting an occupancy rate of almost 95%, Lister is pleased with the present private-to-public mix in the 40 separate chambers he oversees. "Last year 90% was leased, which was too tight on the public side," he said. "We like to have adequate space available to handle overflows which our lessees and others have from time to time."

Despite the recession that has hit the southeast of England especially hard, Lister said that his business has not suffered. "This time during 1990 we were almost too busy," he commented. "Now we have a little bit of flexibility for opportunities."

All in all, the managing director is quietly optimistic" about future prospects for the UK economy. Regarding West Kent in particular, he cites proximity to the nearly completed Channel Tunnel and pending EEC regulations on cold chain maintenance as commercial pluses. "The advantage of being so close to Europe is obvious," he said. "And standardization will cut out the fly-by-night cowboys who only give the industry a bad name," he said.

The Transport Trend

While West Kent is at home in its niche market, in recent years many warehouse companies have increasingly taken on distribution business. Christian Salvesen and Exel Logistics have been active in this sphere, as has Frigoscandia. The latter company transports a sizeable part of Birds Eye Wall's extensive range of frozen foods from two of the packer's primary distribution centers in East Anglia and Humberside.

From the above locations, Frigoscandia operates dedicated deliveries via 38-ton articulated temperature controlled vehicles to the regional distribution centers and composite sites of all major grocery retailers in the UK. It draws from a fleet of over 140 trucks running out of five depots.

Among the Birds Eye products distributed are the Country Club line of premium frozen vegetables and mixes, the Steakhouse range of frozen burgers and grills, a variety of frozen potato items, and the Captain's Table fish line.

"For our primary distribution business, we decided to limit those tendering to reputable firms with whom we had a current working relationship and who met our stringent quality and service requirements," explained Ian Doherty, company logistics manager for Birds Eye Wall's. "Our experience of the rapidly changing demands of the major retailers led us away from arrangements involving large fixed fleets on contract hire."

The Birds Eye business goes a long way towards Frigoscandia's aim of having complete UK and European depot coverage, noted Chris Goodwin, national sales manager for the company's transport division. Trucks, which can carry up to 24 pallets, are capable of picking up and delivering loads throughout Europe - including Scandinavia and Russia.

As for costs, Frigoscandia has introduced a national pallet rate based on each customer's distribution profile. A client's shipment record is analyzed for a two-month period. From this data a pallet rate is calculated which is charged on all loads, thus allowing customers to accurately predict their distribution costs.

PHOTO : With West Kent Cold Storage's occupancy rate at nearly 95%, Ian Lister has noting to complain about. As for the UK economy in general, he voices quiet optimism.

PHOTO : Frigoscandia is handling a good deal of frozen food distribution for Birds Eye Wall's. The transport division runs a 140-vehicle fleet in Britain. Each truck is capable of hauling as many as 24 pallets.
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Title Annotation:effects of food assistance to the Soviet Union
Publication:Quick Frozen Foods International
Date:Oct 1, 1991
Previous Article:Campbell strategy serves up big and healthy breakfasts.
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