Grocery Group Seeks Federal Aid to Avoid Supply Chain Disruption
Grocery Group Seeks Federal Aid to Avoid Supply Chain Disruption
(Bloomberg) -- A group representing U.S. consumer goods manufacturers called for federal aid to help avoid supply disruptions as customers emptied shelves on fears of the spreading coronavirus.
The Consumer Brands Association, an industry trade group, asked for emergency federal funding to help mitigate any supply chain problems and manage input shortages. The group released a letter to President Donald Trump after he convened a Sunday afternoon conference call with U.S. grocery executives.
Trump later asked Americans to cut back on purchases of groceries and essential goods that are straining the system. Major cities across the U.S. have seen shelves emptied of products like canned soup and toilet paper as authorities call for citizens to stay home as much as possible to reduce the virus’s spread.
“There’s no need for anybody in the country to hoard essential food supplies,” Trump told reporters Sunday at the White House. “You don’t have to buy the quantities because it’s hard to refill the stores.”
Trump added: “Relax. We’re doing great. It all will pass.”
Group’s Recommendations
The Consumer Brands Association urged Trump to include federal aid for supply chains in the next coronavirus emergency package. The trade association also called on the president to set up a special supply chain group at the White House to help coordinate crisis relief across the government and work with state governors to assure new public health restrictions don’t interfere with resupply efforts.
The group called for recipients of federal food stamps to be allowed to use the aid to purchase hygiene and disinfectant supplies during the pandemic, while raising benefit levels by a commensurate amount.
The White House declined to comment on the trade association’s letter.
Manufacturers and retailers are already taking steps, according to Doug Baker, vice president of industry relations with the Food Industry Association, such as coordinating to allocate goods to areas that need them most.
Consumer-goods manufacturers are also running their facilities 24 hours a day, while refocusing production on core items while cutting back on some varieties in order to boost output, he said. For example, bleach makers can halt some less-sold, scented varieties so factory machinery can be redeployed to make the regular product line, he said.
Following the statement from the White House, retailers said they will take any steps necessary to ensure the orderly supply of essential products.
‘Unprecedented’ Situation
Kraft Heinz Co. said it will work with government authorities and industry partners “to minimize concerns related to the food supply while protecting our employees.” Campbell Soup Co. said company officials informed the president today about “the steps we are taking to ensure the health and safety of our employees and how we are meeting the increased demand for our foods in response to the COVID-19 pandemic.”
General Mills Inc. said it’s working with retail partners to help them meet demand and that production facilities around the world are running as planned.
“This could look like increased production of some products or utilizing our entire supply chain network to maximize service,” the company said in response to questions from Bloomberg.
Amazon.com Inc., which owns the Whole Foods grocery chain, said the companies are “working around the clock with our selling partners to ensure availability on all of our products, and bringing on additional capacity to deliver orders to customers.”
Greg Ferrara, head of the National Grocers Association, said that the U.S. has “the most efficient and effective supply chain in the world and stores continue to be restocked consistently.”
Baker described the current situation as “unprecedented,” while noting “there is not a supply issue.” Nonetheless, the nationwide scope of the outbreak has made it harder to address shortages compared with regional disasters like hurricanes, he said.
“At some point people will have enough that we will see this abate,” he said. But if it doesn’t, the industry will take more measures such as imposing more limits on purchases, he said.
--With assistance from Justin Sink, Ed Ludlow, Deena Shanker and Matthew Boyle.
To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net
To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Jonathan Roeder
©2020 Bloomberg L.P.