The withdrawal of credit insurance remains a significant source of tension in the trade, according to delegates at Food Manufacture's annual business leaders' round table debate.
Uniq chief executive Geoff Eaton, who highlighted the problems caused by the sudden withdrawal of credit insurance at last year's debate, revealed that suppliers were still unable to get credit insurance to cover their trade with Uniq: "This means that we have had to spend a lot of time talking to our suppliers and keeping them abreast of what we are doing; keeping them comfortable that the business is moving in the right direction.
"For example, our finance director has to sit down with suppliers to reassure them quite regularly. But I don't think that we'll get credit insurance for a while anyway because of the pension issue that we still face [Uniq has a large pension deficit]."
Foodservice supplier Green Gourmet had also found that a lack of credit insurance had reduced its room for manoeuvre with suppliers, said chief executive Adam Starkey: "Because of the credit insurers, we were unable to stretch terms with our suppliers where we might have done in the past. We had to do a lot more housekeeping as it were; it meant that we effectively had to peddle faster just to stand still."
However, Kevin Smith, practice leader for the food sector at insurance broker Jardine Lloyd Thompson, said things could be looking up. He said: "It's my sense that the worst is now behind us. More underwriting capacity is becoming available, including the entrance of a new insurer to the sector."
The Association of British Insurers (ABI) said that trade credit insurers paid out a record amount (£125M) in claims in the third quarter of 2009, compared with £38M in the third quarter of 2008 "This is a reflection of the global recession and the liquidity crisis affecting UK businesses," said Nick Starling, director of general insurance and health at the ABI. "Trade credit insurance often makes the difference between a good business staying afloat or going under."
Food Manufacture's business leaders' debate, which attracted food manufacturing bosses from a variety of sectors, was held at Eversheds' HQ in London and sponsored by Eversheds, Jardine Lloyd Thompson and TBM Consulting.