Beech’s Chocolates demise poses concerns for British SME businesses

With events throughout the sector seeming to be in a comparatively challenging state, is little wonder there has been considerable concern at the sudden closure of 105 year-old British confectionery brand, Beech’s Chocolates within the past week.

The move is particularly sad not just in terms of around 40 skilled sector jobs being lost, but it is yet another very visible reminder that all is not rosy in the sector’s garden.

According to the management of the company, a combined element of rising cocoa prices that made ingredients at least three times more expensive than they were 18 months ago, energy cost hikes, and additional national insurance payments made it untenable to continue the business.

Upon reading that statement, which we have covered this week, it just sounded incredibly sad that an almost perfect storm of financial tests could have combined to wipe out a business that had traded for more than a century as a trusted brand.

Would this have happened without some kind of rescue package in other Western European countries, or even America? It’s hard to say given the present state of market turbulence.

But what it does do is underline that the impact of ingredients price rises during the past year, which have hit the confectionery sector disproportionately hard. 

For all its amazing history of having some of the founding confectionery businesses that have influenced global confectionery development, the UK’s once proud independent sweets and snacks sector is now under pressure as never before.

Things were pretty tough before Brexit, but that’s now made exporting to the Continent all but impossible for SME’s without a high-cost additional base in Western Europe, which was revealed in official Food and Drink Federation figures that alarmingly proved this summer that export trade with the EU from the UK was some 20% less than it was six years ago before the Brexit tariffs and legislation kicked-in. On that basis alone, it is incredibly hard not to view it  as a complete financial failure that nobody is quite willing to admit to, and it becomes the ‘topic that nobody wants to discuss.’

So where does this leave small companies of the size of Beech’s? The future is indeed somewhat unknown given the sluggish state of the economy that has left households with little disposable income in the main. 

What is clear is that what is required is some urgent business support in financial terms from the UK’s Government – which recently published its aspiration infrastructure strategy, which frankly did little to raise optimism within many quarters of the food and drink sector, that remain among the most affected of all market segments.

While global figures may point to an international confectionery industry that has demonstrated a degree of resilience, wherever your SME is based right now, with out some serious support including additional backing for capital investment in automated solutions, or grant funding to deliver new product innovations, then the industry is in for more sobering times ahead. We can but hope markets improve over what are traditionally very busy periods for confectioners, but only time will tell if that’s the case this year.

Neill Barston, editor, Confectionery Production magazine

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