Mike Golding – Managing Director
Is there really any need to raise packaging material prices post the Brexit referendum?
We don’t think so.
It seems to us at TCL Packaging, that some companies are using uncertainty around Brexit as an excuse to increase prices. Some of the industry reactions seem almost kneejerk with every fluctuation in currency and commodity pricing (the upward ones, never the downward) being passed straight on. Whether this is to food manufacturers and packers or others in the packaging supply chain, it ultimately gets passed to the consumer.
As previously cautioned in the piece https://www.tcl-packaging.com/brexit-mean-packaging/ (4th July, 2016) TCL Packaging believes it’s important to stay composed during this transition. Yes, the cost of raw materials from Europe and the US has increased, but so has the cost of imported finished goods which is good for UK packaging manufacturers. There already signs of attempts at reshoring by some packaging buyers to try and offset any negative effects.
We remain confident things will settle and there are already signs they are beginning to. Raw material prices will continue to vary but we think stronger UK companies with firm leadership can largely manage these fluctuations without simply putting up prices. Losing business is one thing, losing customer goodwill is quite another; it takes a long time to win back.
Meanwhile, many of our customers packing product in the UK and exporting are enjoying the benefits of the weaker pound and why not? This is a good time for British exports.
At TCL Packaging, we like to take the long view and this has stood us in good stead. Yes, sterling is low against the Euro at around 1:1.18. However five years ago in 2011 it was hovering around and below this level for some time and yet all this is now largely forgotten.
History is a great teacher, you just have to be prepared to learn. At TCL Packaging we certainly try to. Being mindful of the past has helped us achieve sustainable business growth over many years, both in turnover and in reputation. This has been a good lesson for us and one we continue to heed, whilst continually looking to the future.