As the pandemic winds down, friction between food processors and their trade customers is heating up.
Supply chain problems and other difficulties are preventing food processors from getting complete orders to retailers and restaurants, the Wall Street Journal reports. This is leading Walmart, Sysco and others to re-impose penalties for late or incomplete orders. The suppliers are struggling with labor shortages, unavailable or suddenly pricey ingredients, shipping problems and other difficulties.
Walmart notified its suppliers last fall that if orders fell below 98% completion, they would be charged a penalty of 3% of the value of the undelivered goods. Sysco issued a similar notification in April.
“We believe all our supplier partners subject to these policies have the capabilities to meet them,” a Sysco spokesperson told the Journal.
The stresses on processors include packaging as well as product. A dairy distributor in Utah found enough milk and cream, but after winter storms shut down manufacturing capacity in the Southwest, it couldn’t source enough plastic resin to blow-mold bottles.
