Supermarkets ‘work with suppliers’ on cooking oil as war hits production

Posted by Sino SCS

Supermarkets are working with suppliers to maintain supplies of cooking oil as the war in Ukraine threatens sunflower oil production.

Restrictions have been placed on the number of bottles of cooking oil consumers can buy amid concerns about panic buying.

Richard Walker, managing director of Iceland supermarkets, said sunflower oil sales were being rationed to one bottle per customer.

“It is not as frenzied as the toilet roll panic buying from a couple of years ago, and we are managing to maintain an offer,” he told BBC Radio 4’s Today programme.

The wholesale cost of sunflower oil has risen by around 1,000% due to Russia’s war in Ukraine, as around 70-80% of global sunflower oil supplies are produced in the countries.

Tesco has said customers will be limited to buying three bottles of cooking oil, while Waitrose and Morrisons have limited shoppers to two items each. 

A Sainsbury’s spokesperson told Supply Management: “We are working closely with our suppliers to make sure customers continue to have cooking oils to choose from, including olive oil, vegetable oil and rapeseed oil.”

A Waitrose spokesperson said: “We are closely monitoring the situation and working with our suppliers to make sure customers continue to have a choice of cooking oils.”

Waitrose said it had “good availability” of cooking oils, and it was “proactively working with suppliers to increase orders of other oils, so customers can continue to have plenty of choice”.

Tom Holder, a spokesperson for the British Retail Consortium, told the BBC the restrictions were a temporary measure “to ensure availability for everyone”.

Retail research firm Assosia found a one-litre bottle of own-brand sunflower oil had increased in price by more than 10% – an average of 12p – to £1.26 since January 2022.

Assosia tracked changes in the average price of sunflower oil across Tesco, Sainsbury’s, Asda, Morrisons, Aldi and Lidl.

Previously George Taylor, managing director of crisp company Mackie’s, told SM sunflower oil shortages and high prices could last “ a few years”.

He said the wholesale price of sunflower oil had risen to $5,000 per 1,000 litres, up from around £900 in December, and warned crisp prices could go up by 20-25%. 

Meanwhile, high sunflower oil prices have forced Iceland to backtrack on a pledge to stop using palm oil in own-brand products, which it had replaced with sunflower oil.

The Roundtable on Sustainable Palm Oil said the shortages were causing increased demand for palm oil, which is associated with deforestation.  

A spokesperson said: “It is crucial that we support the production and consumption of sustainable palm oil to prevent any further negative environmental and social impacts.”

Author Sino SCS
中品供应链-Sino Supply Chain Service