Pallet shortages caused by the ongoing global freight crisis are impacting brewers big and small.
The scarcity of pallets is a result of shipping and logistics issues, which have resulted in the stockpiling of goods across multiple industries, tying up pallets in warehouses across the world.
The issue has also been exacerbated by a global hardwood shortage affecting the manufacture of new stock, and it appears that the pallet shortage is impacting brewers of all sizes.
“We have been prioritising production of our top-selling pack formats in response to the national shortage of hard-wood pallets and other supply chain challenges,” said a Lion spokesperson.
Smaller brewers such as Melbourne’s Kaiju Beer are feeling the pinch as well.
“The lack of available pallets is a very real situation and it is taking up a massive amount of our bandwidth at the moment,” explained Kaiju’s Callum Reeves.
“It’s a daily conversation for us about whether we will have enough pallets to pack on to.”
Brambles-owned CHEP is one of the country’s major suppliers of pallets. The company told Brews News it was “continuing to work closely with our customers through this time”.
The writing has been on the wall in relation to the pallet supplier since last month after CHEP released a statement in which it reached out to customers to request “urgent co-operation”.
“As you are aware, the unprecedented and unpredictable shifts in supply chains arising from the COVID-19 pandemic have resulted in higher inventory levels being held on pallets in warehouses to buffer against multiple COVID-19 impacts on global supply chains and logistics, including international shipping disruption,” the statement said.
“Inventory stored on pallets in warehouses across Australia remains at an all-time high, as does the customer demand for pallets.
“With the decline in pallet returns to our CHEP Service Centres, we are unable to provide full supply to customers at this time.”
The company requested that customers return surplus pallets to CHEP distribution centres, where possible reduce pallet requirements in the run up to Christmas, and said it was reaching out to customers who may be contributing to poor circulation.
CHEP also urged customers to report any hoarding of pallets for investigation.
“If pallets are returned directly to CHEP, we would expect a level of easing to the current situation as inventory stored on pallets flows through for Christmas trading,” CHEP’s statement said.
“Looking ahead to 2022, we will be continuing to add increased levels of new pallets to our pool as well as seeking enhanced customer forecasts. Further recovery would be expected once higher than usual safety stocks of inventory can be drawn down.”
Despite some headlines in mainstream media last week, Lion assured customers that there would be no beer shortages ahead of Christmas because of the pallet shortages.
“In response to last week’s media coverage, we would like to reassure everyone that there will be no issue getting beer for Christmas,” a spokesperson from Lion said.
However the brewer, owner of the XXXX, James Squire and Furphy brands, explained the situation with pallets meant that it would be prioritising top-selling pack formats as a result of the shortage of hard-wood pallets.
“While some pack formats for certain brands may go out of stock, the vast majority of our main pack formats will still be available right through the festive season,” said the spokesperson.
“We recognise this is a very important time of year for our customers and consumers and we have been working behind the scenes to secure additional pallets and source alternatives to keep the beer moving.
“We know our products are part of the festive season celebrations for people right across Australia, and we remain absolutely committed to minimising disruptions to supply of our much-loved portfolio of brands over the coming weeks,” a Lion spokesperson said.
While Lion has been impacted by the pallet shortages, Asahi Beverages, owner of Carlton and United Breweries, said it had not been affected in the same way.
“The widely-reported pallet shortages will not impact CUB customers this Christmas because we’ve managed the issue within our logistics network,” a spokesperson said.
“We look forward to continuing to supply our valued customers this Christmas and wish them happy trading over the festive season.”
However, CUB is experiencing issues with the supply chain for its portfolio brand Corona, also due to global shipping challenges but unrelated to the pallet issue, similar to the problems experienced in 2020.
“We expect supply will continue to arrive in Australia in the lead-up to Christmas and we are distributing it fairly to retailers across Australia to help limit shortages,” a CUB spokesperson said.