Opportunity for Northumberland

It is scary these days how much success is based around perception. Fact doesn’t come into it, perception is enough to destroy a reputation, a business, a market or even a country. You can see this in Scotland. Despite the hard cold facts around unanswered question and terrifying risk, the SNP and the YES campaign have succeeded in creating a perception that life in the brave new Scotland will be great and that all Scots have to do is to reject partnership with England.

In playing this card the Yes campaign and the SNP in particular, have stoked fires that have been unlit for 300 years. With yesterday’s absurd comparison between modern Scotland in the union and apartheid South Africa, Alex Salmond has succeeded in  seriously pissing off your common-or-garden English voter. I am no fan of The Daily Mail, but many people are and a column today encourages England, Wales and Ireland to tell Salmond where to stick it. The Scots do not have a monopoly on national self determination and they are prodding a slumbering ogre in baiting the English nationalist in this way. Not content with winning the vote in Scotland, it seems that Salmond wishes to cheese off their best customers to the point that the rest of the UK decides to drop Scotland. With the perception that this behaviour is causing, who could blame them?

So, what for us in Northumberland? Well, the anecdotal evidence is that there are many Scottish businesses who are confidentially looking south. I personally know of six companies, employing a total of 300 who are actively in the process of moving south and will confirm in the event of a YES vote. one of those has decided that the ‘Scottish based’ brand is now too toxic for their majority English customer base and is closing down and moving lock stock and barrel to England.

In the event of a YES vote, we in Northumberland must steel ourselves for significant impact. There is the very real prospect of a closed and controlled border, Scotland would likely have to leave the EU which would legally oblige us to control the border in the same way that Poland polices the Russian border. Northumberland based companies who have large customer bases or suppliers in Scotland will have to take measures to protect their businesses. What these measures would be is difficult to second guess because so many questions remain unanswered.

A YES vote could have a huge impact on Northumberland brands, the division being stoked by the YES campaign could easily result in a cultural backlash to things Scottish, including Scottish products, foods, drinks etc. This could result in a great opportunity for those parts of rUK which produce similar products. Northumberland and Cumbrian beef, Lamb, seafood, beer, cheese. Could fill the void and as Scotland would no longer be a part of the EU we would have a larger market and our producers could be protected by tariffs on Scottish products these could be likely if Scotland reneges on its share of the national debt.

The whole referendum question has put a shot across the bows of the London based state that the rest of the country can no longer be ignored. Even in the event of a NO vote, the scampering of the three leaders to Edinburgh today in an effort to save the union is a wake up call to the London establishment that there are parts of the UK, outside London which feel neglected and under-invested and are only seen as the playground of the Londoner, where they come and spend half-term in pretty hills and beaches rather than a place of innovation and industry.

Whatever happens in Scotland next week, the impact on Northumberland will be significant. We must prepare ourselves to make the exodus of Scottish investment, businesses and talent welcome in our county. Northumberland would welcome you with open arms, you can keep trading in Sterling, keep your UK markets and your EU membership.

However, there is a darker side to this. If the predictions of the pessimists are correct then the Scottish economy could collapse and drag the rest of the UK into recession. In the event of this we would have to brace ourselves for a flood of economic refugees, who were recently our fellow countrymen. It will be a strong test of our humanity whether we open our borders to them or, jealously protect the nation that they rejected.

We certainly, as Confucius once said, ‘live in interesting times’

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When is Alex Salmond going to come clean about what Currency Union means?

clydesdale

Who promises to pay the bearer on demand?

 

I’ve thought long and hard about posting this, I usually keep my politics separate from my business interests but the situation with the forthcoming vote in the Scottish referendum and the implications of a Yes result are too important to ignore any more. So I am putting my head over the parapet, at the risk of the usual about of vitriol and nastiness that seems to follow anyone daring to comment on either side of the debate.

Those of you who know me know that my position on the referendum has always been firmly in the ‘No’ Camp. I moved to England in June and I no longer have a vote (sadly) but I have family, friends and business interests in Scotland, I was born and brought up there and I’ve lived most of my adult life in Scotland. Besides, if Jim McColl, Sean Connery, Brian Cox and Alan Cummings can all back the Yes campaign as tax exiles and ex pats then I think as a tax payer in Scotland for most of my adult life, I’m entitled to a say! For us in our new home of Northumberland a Yes vote would, whilst being sad, be potentially a very good thing. My colleagues and neighbours here envisage millions of pounds of Scottish investment migrating south, jobs on border controls and shopping centres along Tynedale and the Marches catering for the non EU customers from the north.

What I have to say is to those out there who are so far undecided or who are voting Yes in the misguided view that the independent Scotland Alex Salmond is offering will be a ‘free’ country in charge of its own destiny. I’m going to park all the emotion, all my distaste for nationalism in any form and my dislike of the way the SNP in particular has demanded that demonstration of love for one’s country and support for independence are one and the same. They are not and it is my love for my home country and my nation that has prompted me to pen this.

No, let’s keep this strictly unemotional, let’s look at what is on offer.

The Yes campaign want independence, and their supporters are being passionate and forthright about it but this passion is clouding their eyes because, since Tuesday this week they are not being offered independent Scotland but a Scotland that will effectively be the satrapy of the Bank of England and the UK Treasury.

I’ll explain; in the halcyon days of 2006 everything was rosy and we all enjoyed easy credit and life was good. The Euro project had been in operation for some years and economies like Ireland were admired for their spirit and growth. If Ireland could do it the why not Scotland? Scotland had been punching above her weight culturally and politically for a while, leaving the Union and becoming part of the EU, using the success that was the Euro would allow us to tap into the success that Ireland had. Few at the time, myself included, could argue against this. Given the evidence, the benefits were there for all to see. Alex Salmond courted and was courted by Edinburgh banking executives, it looked like he was going to be able to pull of his dream of a lifetime. We all know what happened next and Mr Salmond deleted Fred Goodwin from speed-dial and dropped his association with RBS like a hot sausage.

This was Plan A – Euro membership and when the Euro zone started to recover it became an option again. However, he (Salmond) hadn’t factored the political pressure that could be brought to bear by those states who oppose, what they would call, ‘regional self-determination’ Spain being very vocal for obvious reasons. The relatively recent union of nations that is Germany scratched it’s head in Teutonic bewilderment over the idea, to a German, uity is everything. To reassure everyone the SNP hiheidyins commissioned a report on the likelihood of an independent Scotland retaining EU membership. We waited for the publication….and we waited….and waited.  We knew the report was finished but Mr Salmond wouldn’t publish it. This ended up in court and eventually in the Scottish Parliament where the SNP used their majority to bully through an ‘Erstaz’ version with a positive spin and to block the repost in its unadulterated form.

Why? Well, the reason came obvious when the answer from Europe was a resounding NON. Scotland would HAVE to reapply for membership and this would take some time (periods of up to six years have been quoted).

Now this left the SNP with a BIG problem, if automatic, seemless entry to the EU and membership of the Euro was no longer an option, then what currency was the Independent Scotland going to use?

At this point, spring 2014, it could be argued that surely, given the ramifications of this decision, the referendum should be postponed until after the UK’s EU membership referendum? This would allow time to consider the situation and address this currency issue. But this didn’t happen.

It was only a matter of time before the No campaign spotted the gaping hole in the Yes campaign’s strategy – what the hell was iScotland going to use for a currency? Immediately the main UK party leaders all issued statements categorically saying there would be NO currency union with an independent Scotland.  Darling made capital on this in the televised debate on the 9th and grilled Salmond to tell everyone what his ‘Plan B’ was going to be? However, the No campaign leadership has miscalculated. You see, to most of the population, a currency is the money in your pocket, in your bank account. What you borrow on your mortgage or from a payday loanshark, what you buy food with and what you change into Turkish Lira at the airport. What they rarely do is look at what it says next to Robert Bruce’s stern, glowering face on the Clydesdale Bank £20 note..”no – it doesn’t say “take that you English b*****d!”, it actually says, next to the etching Bruce in his armour,   the words: “promise to pay the bearer on demand”. Darling etc. had miscalculated because they assumed that the common or garden Scottish voters would all understand what a currency is. Darling hasn’t understood that the hoi polloi don’t necessarily get the meaning of this phrase. ie who is going to pay the bearer on demand?

With his instinct for the populace, Salmond worked  out that most of us don’t understand what a currency is beyond what it is called and all he had to do was to say “we’ll use the Pound!” There is nothing to stop us using the pound, lots of countries use the pound as currency – Egypt etc etc…He even got the flustered Alistair Darling to ADMIT that Scotland can use the pound during the debate this week and since then the Yes supporters have been dismissing any challenge on the question of currency with contempt – “That question’s be answered, how many times do I have to repeat it? Are you deaf?”

Sadly, most of us don’t understand the hugely complex world of international finance, what is it that makes our money worth what it is? Who is paying the bearer on demand? I’m no expert but I do know enough to understand the complexity. It is not what the currency is called that is the issue, rather what is behind the currency, what is it’s substance?  In the days of the gold standard it was simple – turn up at Threadneedle Street, hammer on the door, hand over your £1 note and the Bank of England would give you £1 in bullion – simples! Thing is that the western economies no longer fix their currencies to a gold standard. Currency is valued on open markets which set the value based on many factors but the stability and size of the economy behind the currency is critical as is the careful and responsible administration of the currency by a central bank, in our case the Bank of England, which regulates our economy and is able to influence the value of our currency by turning the ‘gas’ of interest rate up and down. Interest goes up people stop spending and the real word value of the £ falls as demand for products falls. Interest rates fall and the opposite happens. The policy is, to an extent, decided by committee but heavily influenced politically.

The problems in the Euro zone have highlighted the dangers of currency union without political oversight. The reason why the rUK parties have been so vociferous in their refusal of a currency union is because they understand that to snip off 15% of the UK economy and population and to give them uncontrolled spending of the pound would be financial and political suicide for rUK. The money markets would take a very dim view of the lack of control of the £. The value of the currency would be undermined. rUK’s credit rating would be downgraded and the UK would have to pay more to borrow money from the international markets. There is no way that rUK will share the currency with rScotland.

So, Alex and John Swinney have decided to adopt what some see as a highly irresponsible option – that is to threaten rUK that unless iScotland gets a currency union with them iScotland will renege on it’s share of the national debt. Now legally, iScotland doesn’t have to accept any share of the debt but politically and financially it is highly irresponsible not to mention amoral. We don’t have a monopoly on national self-interest, already people in rUK are beginning to grumble about the ‘whining jocks’ this threat hasn’t gone un noticed by the English right who, having been relatively laid back about everything are now starting to sit up; this at a time when the centre right parties are combating the rise of the right. This threat means that if Yes wins, there will be huge pressure on the moderate Cameron to play hardball with negotiations if he doesn’t then Alex and John could quickly find themselves negotiating with Boris, or even Nigel.

Welshing on the debt would also undermine our ability to borrow money on the international markets which would cripple our ability to establish our own currency whether it is Stirlingised or not. On top of this it is an all-or-nothing throw of the dice by the SNP leadership. They are assuming and hoping that rUK sees more risk in not being able to off load a relatively small portion of the national debt versus the risk of currency union.

So – let’s assume Yes wins and Scotland is able to secure a currency union with rUK – what will that look like?

Well, it won’t mean independence. Far from it, the only way the rUK would possibly consider a currency union is if the Bank of England has a veto on iScotland budget and spending in the same way that The European Central Bank has a veto on Ireland and Greece. Don’t take my word on it, John Swinney recognises this and has admitted it in a leaked memo. For those of you who want independence – CURRENCY UNION WITH rUK IS NOT INDEPENDENCE. In fact, it is less democratic than our current situation, by voting Yes we will have given up any say we have in how the Bank of England operates. The Bank will now operate exclusively for rUK Treasury and will put the interests of rUK ahead of those of the foreign country that is Scotland.

On top of this there is no guarantee that rUK will agree to any sort of currency union. Swinney’s threat is a drastic and desperate move, independence at any cost.

What happens if there is no currency union? Well, we don’t know because Alex Salmond hasn’t told us. Mumbles like “you sound like a broken record” or “sterlingisation” are the response to “what about plan B?” We simply do not know. I suspect, however, that if Plan B is very bad news (like the Europe Report (buried) or the Independent cost analysis of separation (promised but never delivered) then Alex Salmond will simply ignore the question as he has done with other issues that are unpalatable for the voter. What we can speculate is that a stand alone currency, sterlingised or otherwise would be at the mercy of the money markets and as volatile as the petrol that underpins it. With no central bank or lender of last resort between us and the IMF one can only guess at the credit rating we would be allocated and the subsequent cost of borrowing the money needed to run the country. This could mean decades of austerity that would make the recent years look like a picnic and then we could be left with a currency worth a fraction of sterling or the Euro. This isn’t scaremongering, it is a sober reality.

What happens if there is no currency union then? Well this is just the latest in a line of questions that Alex Salmond simply refuses to answer. Either because he can’t or because he won’t. I am angry that he shows the people of Scotland so little respect that the will not just lay all the cards on the table and allow Scots make a decision after examining all the facts. It feels like the wool is being pulled over our eyes, that we are being distracted and diverted from the issue.  It’s like they are trying to sneak independence under the radar of the national consciousness. Mr Salmond is, in short, treating this like a general election campaign rather than the potential matter of life and death of a nation that it actually is.

Some of you will have already decided which way to vote. Some of you will passionately disagree with everything I have said here. Some of you might be undecided. However, understand this  – it’s not a general election. This isn’t a case of “I might try ‘yes’ and see how it turns out”. If on 19th there is a Yes majority then that is it, we cannot go back. If you believe in an independent Scotland then at least demand that the SNP and the yes campaign come clean and share everything with the electorate, warts and all and trust us to make a decision.

There will be no going back, end of, Scotland becomes a foreign country to rUK and the border will be an EU border. So for God’s sake and for the sake of your descents, make sure you give this decision very careful thought and only vote in the interests of the generations of Scots to come.

Food Poverty and malnutrition – manufacturers to blame again?

 

"Let 'em eat Aldi Crisps!"

“Let ’em eat Aldi Crisps!”

 

There’s an article on the BBC Website here it is highlighting a report by the Faculty of Public Health which has identified a link between food poverty and malnutrition. 3rd world health conditions like rickets are being seen in hospitals for the first time in decades and last year there was a 17% increase in hospital admissions for malnutrition. Now I am sure I am not alone in thinking that whatever your place on the political spectrum this is an absolute disgrace in a country like the UK. I’m waiting for the inevitable ‘It’s the food manufacturer’s fault’ interviews. I’m surprised that at no point does the reporter link food poverty to obesity, for which the industry is also blamed.

Increasingly those in poverty have issues affording nutritious and fresh food. In Aldi you can buy 30 bags of flavoured crisps for about £2-£3 depending on where you are in the country. If you are trying to feed a family of 4 on £25 a week then this sort of offer is very tempting. Obviously there is fresh food available but one thing you never read about is the cost of preparing the food. Yes, you can buy a kilo of lentils for £2 and yes it is nutritious and will do several meals but you also have to boil those lentils for 40 minutes. That’s 40 mins of gas or electricity. On top of this, have you tried to get a 4 year old to eat dhal? When folk are so skint their main issue when buying food is to make sure no one is hungry and that often leads to 30 bags of crisps going into the trolley. I wonder how many of those who judge the diet of the poor so harshly have had to live on the income of the poor? Recall, with amusement, the well meaning but utterly unrealistic campaign that Hugh Fearnley-Whittingstall launched in 2007 when he campaigned against the mults to get them to stock properly bred, free range chickens rather than the mass farmed thai type. Yes, he had some really good points – a quality chicken bought from a butcher will taste fantastic, it will probably last more than 1 meal BUT it costs £10. It is easy to see why his arguments fell on deaf ears and became archaic when, a few months later the Great Recession hit with full force.

Time and time again it is the food manufacturing industry that gets the flack about obesity for making food that has too much salt and too much sugar etc. when the real culprit is poverty. Cheap food has always been highly flavoured, there is nothing new here. French Cuisine is sauce and flavour based because historically, the quality of their meat and fish wasn’t up to much and hence it needed flavour. Your Georgian Briton would sneer at the French and proclaim the excellence of British beef which didn’t need such flummery. It is wrong to blame the food industry for these issues, processed and preserved food was always only meant to be part of a diet and to be eaten when fresh food was not available. Aldi don’t expect you to live off crisps. The real issue is the price of fresh food and with the increased competition from emerging markets it is unlikely to drop in price rather than blaming the industry we should be focusing on making fresh food more readily available and cheaper to cook.

This sort of information used to be provided by Ministry of Food films and perhaps it should be again as it is a matter of education around what to eat, how to buy it and how to prepare it without it costing the earth. My grandfathers both grew their own vegetables and some fruit as well. How many of us, with access to some space do this? Yes, to the educated person those public information films were cause for amusement but they did carry important messages. You cannot assume that your values are those of others and you cannot assume that people understand the harm in liquidising a hamburger for a baby. But there is no point in increasing availability unless you back this up with how to cook it and the benefits of doing so. Food programmes are hugely popular but many of them are food porn – yes Mr Roux that dish looks fantastic and how much would I like to eat it, however, I’m just going to shovel another forkful of Asda lasagne down my gullet because it was £3.00 and I can feed the whole family on it and I’ve had a 12 hour day at work so in the grand balance of things, given the ready meal costs about the same as the raw ingredients to cook, am I going to delay dinner by 90 mins whilst I prepare the lasagne or am I going to bung this Asda special in the microwave? Convenience food was and always was meant to be a stopgap, however we have filled the time it saves us in preparation with other activities, and in a time of fiscal pressure, that is usually work. So the convenience food is now a necessity.

It’s obviously easier to get the message across in centralised economies. In Cuba they understand this and the power of educating people. Fuel has always been an issue and over the last 30 years the emphasis has been on saving fuel and especially in cooking. So the Cuban government made cheap pressure cookers available to all households. It is simple arithmetic, after a hard day of Stakhanovite labour on the collective farm those lentils that take 40 minutes to boil can be cooked in 10 minutes in a pressure cooker. Extrapolate the arithmetic, the majority of Cuban households have pressure cookers, the saving in fuel and carbon emissions must be huge. Now I remember a pressure cooker being used by mum in the 1970s, they were popular before the advent of the microwave but how many of us use them now. I only learned about the advantages of using one by listening to the Radio 4 Food Programme last year. I work in the industry and I didn’t know this – what chance do others have unless lucky enough to have caught the programme.

In our house we recently invested in a Halogen oven, a device that sips the leccy. Together with a microwave and a pressure cooker we now only use the main gas oven perhaps once a week and our power bill has gone down considerably. Halogen oven = £30, Pressure cookers start at £12.

So please, let’s not have a pop at the food industry for these issues when the real culprits are poverty and the lack of education as well as the culture towards food that we have allowed to emerge in this country over the last 30 years.

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The importance of back to basics networking..

In recent years I have moved from working in a large corporate entity to a role where the necessity for day to day contact with colleagues has been replaced by social media/video conferencing etc. Living and working 300 miles from my colleagues at head office can be challenging and when you focus on national or international business rather than local business opportunities for face to face contact with other professionals can be limited. If you are not careful you start staring at the wall and talking to yourself!

This is why, as well as working with Cotterell & Gifford, I also spend about 10-15% of my time working on local projects with local businesses which rarely have anything to do with my primary industry specialisation. Part of this is motivated by my strong belief in involving myself in the local business community. Since we made the decision to move from urban, Edinburgh to market town, Hexham this is far more in your face. Yes, I could buy my printer paper from Viking but then again, I could pop round the corner to the PC Support shop and buy it there, it might be 5p more expensive but, if that PC Shop closes I’ll be the first to moan about the shops all becoming bookmakers and charity shops. If I want to live in a town with a thriving center, a strong economy and decent property values etc then it is my duty, as an inhabitant of that town, to ensure that I use my expertise and purse for the benefit of the local area.

The other part of my motivation is that getting involved with local client and businesses when you are a self employed consultant is a good way to stop getting cabin fever!

This morning I attended the Willow Wednesday Breakfast  networking event organised by NorthEastBiz. Now, obviously, being home based I am used to a 15 second commute – a shuffle with coffee from the kitchen to the corporate hub of my home office so this was daunting. I had to be 40 miles across Northumberland by 8.00am. Fortunately my choice of egalitarian transport, a 30 year old Volvo 244 decided to start and I made it in good time. I am very glad that I did. I met several people who I will do business with at some point in the next 12 months, of that I am sure and one of whom we are already discussing forming a strategic partnership which will benefit my main, national business occupation. On top of this, the injection of enthusiasm and the energy of like minded individuals is infectious and it gave be a good dollop of drive to counter the “August – no one’s around” blues.

In this era of in bound marketing and social media it is easy to ignore traditional business networking. However, groups like NorthEastBiz are doing superb work in facilitating these networking opportunities.

Even if your main occupation is interim management or highly specialised, there are always businesses and organisations locally that could benefit from your experience and, OK, whilst you will probably not be able to charge your full rate, you won’t be diluting your brand either and the wins are far more than just on a fiscal level. I would recommend getting involved with your local business networking groups to anyone who is self employed or running their own business even if you doubt that it will help, it’s amazing what you can find on your doorstep.

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Don’t ignore opportunities with local businesses, you can be surprised what you can find on your doorstep

 

 

What are the consequences of the rise of the discounters for coeliacs and others requiring a special diet?

Most Sainsburys Sausages contain gluten

Most Sainsburys Sausages contain gluten

Our daughter, 5 years old, has coeliac disease. For those of you who don’t know what that is, coeliac (spelt celiac in American English) is an auto immune disease where the body attacks itself when gluten from wheat, barley or rye is eaten. The amounts of gluten that can provoke an attack vary from patient to patient but we are talking small amounts. A grain of flour is usually enough. When she was diagnosed we had to learn how to cook without gluten, we shifted our main carbs in the family to rice and spuds and separate cooking utensils, toaster, pots and pans, cutting boards and cupboards were needed. We are fortunate to have a reasonably large kitchen and keep a section of it totally gluten free. I used to bake all the family bread, now we only bake gluten free cakes and biscuits, the risk of aerial contamination from traditional four is too high. Consequences of provoking the disease are unpleasant for her and for us. Pain, illness, explosive vomit and diarrhea. Prolonged exposure results in weight loss, swollen abdomen, deficiencies in minerals and vitamins, pain, depression, mood swings, stilted development. There is assumed to be a 1% incidence in the UK population, however, diagnosis rates are much lower.

We had to learn how to shop again. Gone was the weekly trip to Sainsburys, we now had to track down the gluten free products we needed to buy from different stores. Not only to the shops carry different products but they don’t have consistent ranges from store to store. One Tesco may have a superb range of gluten free frozen products whereas another may not stock them at all. It makes the whole experience very tricky. It’s not just limited to specific ranges but to all sorts of items. Read the ingredients of many products and you will find they contain wheat, barley or rye gluten. In Sainsburys all own label sausages apart from the Toulouse ones seem to contain gluten. In Tesco it’s the opposite. Own label table sauces and ketchups frequently contain gluten as a thickening agent, Heinze Tommy K doesn’t. HP Sauce is a no no, Red Lion is fine etc etc.

In our town, Hexham, Northumberland, we are fortunate to have quite a choice of retailer. In addition to good market in the square every week there is a large Tesco, Aldi, and good mediums sized Waitrose, M&S and Iceland. 5 miles away is a Sainsbury, 20 miles away a huge Asda. Our shopping habits are usually – Aldi for 75%, Waitrose for 25% with fruit and veg coming from the market, when we are around, and dog food AND gluten free products coming from Tesco. Aldi is hopeless for specific gluten free products, although most of their own lable products are gluten free. Waitrose can be good but our store isn’t. So when we want to buy gluten free fish fingers, pizza, chocolate bikkies, croissant, chicken nuggets etc we go to Tesco. (Wait a minute, we shouldn’t be feeding our kid junk food – of course we don’t but in the real world time constraints and special teats mean that on occasion the kids do get pizza and why shouldn’t she be allowed to enjoy what her brothers and friends are eating?)

I do have a concern here. The average big 4 supermarket carries 30,000 different products on its shelves. The average discounter (Aldi/Lidl) carries about 1500. The discounter’s business model is to carry own label brands and to buy up and shift on quickly surplus branded products, hence the open pallet and cardboard boxes you see in the shop floor. Their own products are sold across Europe and benefit from a cultural lack of using gluten as a thickener/binding agent (remember the British Banger war Jim Hacker got into in Yes Minister?) However, stocking specific gluten free versions of food containing gluten is far removed from their business model. The big 4 have become community services, with dry cleaners, banks, insurance, clothes, chemists, and post offices they sought and seek to be everything to everybody. One of these services is to dedicate shelf space to specific free from foods giving those who suffer from food allergies and auto immune diseases as wide a range of ambient and frozen basic and luxury products as possible. They have been getting good at it and with the investment companies like Tesco, Genius and Warburtons have made in their gluten free ranges in the last 5 years we know that we can always get out hands on a loaf of fresh gluten free bread in a reasonably sized supermarket. This was never the case 5 years ago. Now whilst these products are considerably more expensive than normal products and you never see BOGOFs or discounts on them, the smaller turnover of them means that they won’t be large profit makers and the high cost of the ingredients and production means that they are expensive for the retailer to buy or make and are very unlikely to offer the potential margins that a discounter will be looking to make. Despite the increase in availability I’ve already mentioned that ranges stocked are not consistent across stores but it is improving.

Over the last 12 months, all the big 4 with the exception of Asda have seen a drop in their profits. An estimated £3billion less has gone through their combined tills during that time and has been spent instead at Aldi and Lidl who have seen sales growth of over 30% for the former and over 25% the latter. Meanwhile the big 4 are caught in a price war, with each other and with the discounters. They continue to slash prices of electronics, clothes etc to try and tempt back customers as they are unable to compete with the discounters on food and grocery. All this is having a knock on effect on suppliers who will be increasingly squeezed to cut costs, NPD etc. Analysts are concluding that this is now a fundamental change in retain behaviour by the British consumer and that gone are the days of the big weekly shop – people are now asking if the hypermarket be a sustainable model in the future?

As a customer who requires to buy gluten free products I’m concerned that not only NPD but also the availability of off the shelf gluten free products may well suffer. Ironically, more customer choice in terms of price will lead to less customer choice in products. It’s not as simple as transferring our loyalty and our 75% from Aldi to Tesco either, as I have already mentioned, only very rarely do Aldi and Lidl own label brands contain gluten in the ingredients. We can pretty much put anything in our trolley without having to read the ingredients to see if gluten is lurking in there. This isn’t the case at the big 4 but if we want to buy specific free from products we have to go to Tesco as whilst Aldi stocks gluten free bread and some products, the range and quality varies. (Gluten free bread, unlike wheat bread, has a huge variety in price, taste, quality and consistency from stuff that you could sole a shoe with to almost un noticeable from the real thing). If the continued rise of the discounter leads to the inevitable conclusion of big 4 closing stores and cutting back on ranges, off the shelf choices for those who require these foods will become less and less available. New product development, requiring subsidising from other ranges could fall when the financial pressure is felt. Aldi and Lidl are starting to stock these products.

glutenfree lidl

Lidl Ireland’s 2013 Gluten Free Promotion

As already mentioned, Aldi carries a bread and in 2013 Lidl stores in Ireland had a large gluten free promotion and published a booklet. It will remain to be seen if the discounters start stocking large and comprehensive quality ranges of free from fresh, ambient and frozen products. To me it seems so removed from their business model I cannot see it happening rather, those requiring a reliable supply of these products will have to resort to web based specialist retailers and won’t be able to pop out for a packet of biscuits of a quality loaf of bread. If this isn’t the case, I would be very interested to hear from Aldi or Lidl about why it isn’t and what we could look forward to.

How to Choose a Head-Hunter

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Thus article is aimed at HR Managers and senior hiring managers and will hopefully give you some value and insider information when selecting a head-hunter for a specific task.One of the periodic headaches for any HR Manager or hiring manager is who to choose when a retained Executive Search is required. It’s a tricky one, I have both commissioned searches (up to £350k salaries) and sold search services. Based on my experience as a customer and a head-hunter, here’s a brief guide:

First thing to consider is when it is appropriate to use retained search over success based recruitment. Definitions, retained search is when a supplier is solely appointed to a project and their fee is split into an initial project retainer and one or more other payments either at stages or on success. Contingency or success based recruitment is when one or more suppliers are given the vacancies to fill and their work is paid for on successful delivery. A general definition is that a ‘Recruitment Consultant’ tends to work on a contingency basis and a “head-hunter” or “search consultant” tends to work on a retained basis. However, that is not always the case as depending on sector you get RCs who also offer, and are very capable head-hunters when appropriate and head-hunters who will be willing to work on a success only basis when it is appropriate. Choose on specialisation and reputation and not on job title.

When to use retained search?

A general rule of thumb I have always followed is consider retained search when the position is either business critical, senior, a very rare skill set or where confidentiality is required. If it is absolutely critical that you have the best available candidate in the market at that time in the job by a certain date then retained search is definitely the route to go down. Search and Selection Consultancies essentially sell risk management.

What service to demand/expect?

You are not just paying for the role to be filled. You are paying for the role to be filled by the best candidate available (when compared to their peers) at that moment in time and who is interested in the opportunity. This means that when you hire Mr Snooks you can rest easy knowing that Snooks has been selected against a thoroughly vetted shortlist that was based on a quality long list of potential candidates initially approached. Depending on the service level agreed as a minimum you should expect to be:

1/ provided with a shortlist of candidates selected from a long list (which should also be provided)

2/ comprehensive report on the reaction of candidates in the market to the client’s position and brand both positive and negative

3/ detailed interview and personal notes on each shortlisted candidate, unless exceptional circumstances occur the head-hunter should have met and extensively interviewed the candidate at least once.

4/ reference and document checking as well as qualification checking should be provided

5/ management of the candidate throughout the offer stage and throughout the notice period

6/ professional communication to all unsuccessful candidates

7/ evidence of the activities carried out during the search

8/ some after sales service.

 

 

Who to choose?

I’m going to make myself unpopular with some of my colleagues here. If you don’t do anything else, choose the head-hunter and not the company they work for. Head-hunters are like lawyers, they get to know their area of specialisation, they become respected within that area, they become trusted in that sector and within the pool of professionals within that sector, when they move their business tends to follow them. Appoint on this reputation and expertise of the delivering consultant. Remember, big names and fancy brands are OK if you want to make a big noise in the market and keep shareholders happy but if this isn’t a requirement, time spent finding niche experts will pay dividends. Over the last 8 years, more than at any other time, there has been huge churn within the search industry. Many household name companies have struggled and as a result, many of the expert consultants and head-hunters who worked for them have either left to set up their own businesses or are working with sector specific companies who, due to their smaller cost base, will be more willing to pay higher rates of commission to the best head-hunters. Ask your colleagues, who would they recommend as a head-hunter in the sector? Check on LinkedIn, it’s now a highly sophisticated source of information of this type. Another benefit is the smaller cost base of the independent specialist company means that your fees are usually less. You are not paying for Mayfair offices, a fleet of powerful cars, teams of researchers and admin or expense accounts, these businesses will be lean and mean and have seen a growth in recent years at the expense of the ‘big boys’. Above all remember that the amount of money you throw at the search doesn’t necessarily translate into successful delivery.

What to pay for?

Ensure you know what you are paying for. In the past some companies have charged excessively for additional expenses. Phone bills, paper, photocopying, secretarial support, travel are all extras which some search companies will charge you for. One business I had dealings with in the past (no, I won’t tell you who it was)once hit their client with a ‘supplemental recruitment charge’ of £10k as they were a few K short of their target that month and bolted the  charge onto the back of a search, the client paid it without question. Now sometimes these extras will be necessary and the search company might genuinely require assistance to pay for them. For example, you decided to take a suite of rooms at The Connaught for candidate interviews or there is a requirement to interview candidates in Australia etc. However, all these additional expenses can and should be discussed and agreed on before the search starts. Go through the terms of business with a fine toothed comb, if you feel it is necessary, get a procurement or commercial expert to help you with the terms and negotiation. You are the customer here.

 

Guarantee and after sales support

Most companies involved in recruitment offer a rebate scheme should the candidate leave . This is typically on a sliding scale and can be ayting from a week to 6 months. I offer a 12 month free replacement if the person I headhunted and placed decides to leave the business within the first year of employment. It is beyond me why this is so rare in the industry. Surely if you are doing your job properly then you should put your money where your mouth is. It also ensures after sales support. A new employee is a change in the business environment and change is always an issue. It is very important that the head-hunter, with the agreement of all parties, remains in touch with the individual hired after they start the new role. I have seen and experienced several incidents when after sales communication has prevented the hire from leaving or failing in the role, especially when the new hire is not given the support required, it often takes a 3rd party to highlight the issue to the employer or make HR aware so they can take action. This is after sales service and it can be highly effective if professionally used. I always offer it, it beats me why it’s so rare in the industry.

 

Which method you choose and which search company you appoint always ensure it and they are fit for purpose. High risk, confidential, senior, business critical, rare skills or bum-on-seat-by-definite-date then absolutely consider retained search. Otherwise contingency should do.

 

Next episode – “How to set up an In House Search Function, The Basics”

 

 

The end of the UK Big 4?

big4

In the last 12 months we have seen a fundamental shift in the retail food sector in the UK. With the big 4 losing £3 billion in till receipts and the discounters seeing phenomenal growth, industry analysts are announcing a tectonic shift in the FMCG market in the UK. How is this going to affect our industry? Is this a threat or an opportunity?

Inflation hasn’t been followed by wage packets. Our economy is growing but our earnings aren’t. For years in the UK the consumer was happy to purchase from an increasingly smaller pool of suppliers. In energy and banking our options are limited, competition is nonexistent, anger and frustration rife, the only  recourse the consumer has is government backed industry enforcers. Mrs Thatcher, love her or hate her had one thing right when she identified two biggest threats to individual freedom being big government and big business. By big business she meant companies that were so powerful they totally dominated their markets killing choice and competition. The reality of the credit crunch has changed consumers, whilst their options in banking and energy markets are limited, the one sector where they can show their new muscle is in their grocery bill and flexing them they are. Is our sector becoming the whipping boy for the frustrated consumer?

In the last 12 months £3 billion has left the tills of the big 4. Consumers are far more cynical, their shopping habits have moved from the convenience of a big weekly shop at one store, a new breed of canny shopper has emerged. Worryingly, for the big 4, there is evidence that the professional classes are now leading this anti-consumerism; the basics are bought in discounters and the luxuries in Waitrose and M&S. A recent Channel 4 Despatches Documentary last week identified this trend and anger in consumers who, rightly or wrongly, feel that they have been ripped off by the big 4 for years. Those doing a one stop weekly shop are now seen as wasteful, it’s fashionable to be canny. It’s a fundamental shift; probably the biggest in the last 20 years and it shows no sign of slowing down or changing.

So, what does this mean for those of us who work in the food manufacturing sector? Is this an opportunity or a massive threat? Whatever it is, the speed of the change will have huge implications.

Are our business models fit for purpose?

The average big 4 superstore has over 30,000 products on its shelves, the average discounter, 1,500. What does this mean for the manufacturer? Our business models have been honed to service the demanding buyers of the big 4. Customer auditors have lorded it over our factories. The demands of the big 4 have been brutal and the level of control such that they have been able to effectively dictate to suppliers for years. We all have war stories of how the big 4 have enforced their demands. The problem is, that we have, through necessity, complied with these demands. This has created models that are ideal for servicing the big 4 but with the disintegration of their power, how relevant are they for the future? The consumer seems to want basics that are more basic and luxuries and fresh that are local, have provenance and high quality. Those suppliers wholly dependent on big 4 supply contracts could be in for a very nasty time.

 

The big question is, what can we do about it? Are our businesses sufficiently savvy and fleet of foot to cope with the changes in the market?