FDBusiness.com

The UK food and beverage manufacturing sector faces an increase in the number of companies facing ‘critical‘ financial problems for the first time. The latest Red Flag Alert issued by Begbies Traynor, the UK’s leading business recovery specialist, shows that the number of food and beverage manufacturers suffering from ‘critical’ financial problems has increased markedly by 24% since this time last year – the first increase evidenced in this sector.

In addition, Begbies Traynor found that the number of UK companies facing ‘critical’ financial problems across all sectors has risen by 12% to 5,179 as more businesses make the transition from ‘significant’ to ‘critical’ problems.

Julie Palmer, Partner at Begbies Traynor, comments: “This is the first time that we have witnessed a rise in the level of critical distress in the food and drink manufacturing industry. The rise can be attributed to the impact of reduced margins within supermarket supply chains and higher input prices that are being absorbed by the manufacturers.”

She adds: “It is a real concern that reduced levels of consumer spending are impacting on businesses across the supply chain for very basic products such as food and beverages – anxieties about low consumer confidence are not limited to retailers and manufacturers of high end or luxury goods anymore.”