In the UK like in Europe, the coronavirus outbreak is presenting a significant challenge for the packaging industry in terms of both consumer demand and supply.
Following the UK government’s announcement of strict containment measures, a long list of businesses deemed not critical were ordered to shut. On the supply front, meanwhile, there are concerns after the government estimated that up to one-fifth of employees may be absent from work during peak weeks.
Reflecting on the crisis, Stephen May, supply chain expert at PA Consulting, pointed out that while the initial disruption was seen mainly in the supply chain of businesses such as automotive and consumer electronics rather than felt directly by consumers, now almost everybody is affected. “Deeper disruption from potential factory shutdowns caused by travel restrictions on workers will start to be seen in addition to the existing supply chain disruptions,” he warned. “The first shock in the supply chain will be caused by the scarcity of supply,” he added.
Dick Searle, CEO of the UK Packaging Federation, is confident that the packaging industry will hold strong. “We obtained key industry status from the Department for Environment, Food & Rural Affair sfor certain segments, such as food and drink, pharmaceuticals, hygiene and cleaning products among others. This means they are still running with the professionals involved in their manufacturing getting ‘key worker status’(…),” he said. However, it is not entirely clear whether the “key worker” status includes all packaging activities and professionals at present.
While luxury products and their packaging are not deemed to be essential, “nobody is suggesting we should shut manufacturing totally,” notes Searle. “Our industry is tough, and has been over the past decades, but we’ll fight our way through. What’s important is that all our materials supply lines seem to be open at the moment,” Searle concluded.
According to the UK Packaging Federation, the packaging production industry generates annual sales of £11bn ($13.5bn) in the country and employs about 3% of the manufacturing workforce.