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Grocery supply chains in demand following Australia wide shortage of toilet paper

Commodities such as toilet paper and tissues have been wiped off the shelves of leading Australian supermarkets, boosting the demand for stock and sending supply chains into overdrive.

Australian shoppers have been buying extra supplies of pantry items including canned food, long-life milk, pasta and rice and other commodities including hand sanitisers, disinfectants and cleaning products have also been in high demand.

The cause of consumers stocking up on these commodities is a precautionary method to prepare for possible future quarantine periods in Australia due to the global spread of the Coronavirus outbreak.

A spokesperson VISA Global Logistics said for its fast-moving consumer goods (FMCG) clients, VGL has seen demand skyrocket.

“As an example, one of our clients usually deliver 120 ton of products a day to supermarkets. This week, this has peaked to 1,200 ton per day,” the VGL spokesperson said.

“VGL has been working round the clock to facilitate deliveries to assist our Clients to respond to this demand.”

Kimberly-Clark (KCA), the United States group that manufactures the Kleenex brand of toilet paper and tissues, said production has increased due to the high demand for product lines at its Millicent factory in South Australia.

In response to the demand of toilet paper this week, the Millicent mill has ramped its 24-hour production, as are Sorbent in their NSW and Victorian facilities. The makers of Quilton have tripled their normal production across their factories in Queensland, NSW and WA.

Last year, KCA announced the closure of its Ingleburn Mill in Sydney as part of a global restructuring program. Some production has moved to facilities in KCA Asia but locally, Kleenex, VIVA and other KCA products remains at the SA 24-hour mill.

In a social media post by Kleenex Bathroom Australia, the company posted an image of an employee inside the stocked Millicent factory and said “as you can see we won’t be running out anytime soon”.

“Australia, don’t panic! We are working around the clock at our mill in South Australia to keep the supermarket shelves stocked,” Kleenex said on social media.

VGL said the supply chain industry worldwide is feeling the effects of the coronavirus with significant impact on the arrival, departure and movement of containers in Australia.

“Factories in China are now back to 90-100 per cent capacity. With the number of new cases of COVID-19 slowing in China, and a gradual return of their labor force, we are starting to see the beginnings of recovery for the transport industry,” a VGL spokesperson said.

The Freight and Trade Alliance (FTA) said in a weekly update on Wednesday that most of the eastern provinces such as Zhejiang, JiangSu, Fujian, Guangdong, Shanghai, Shangdong are back to work in China.

Most nationally owned manufacturers are at 80 per cent productivity and logistics companies back to running around 95 per cent. Measures are also being taken to ensure that any factory and business that is re-opening has met all requirements for cleaning of their facility and equipment.

Most provinces have reduced their control restriction from level one to level two, this means other provinces’ workers, if healthy, are able to travel into most of the provinces.

FTA stated that it is also understood that there are reasonable stocks of export goods in storage that should be able to enter the supply chain immediately once those places open back up.

However, toilet paper shelves are still left empty at leading Australian supermarkets by consumers this week.

On Wednesday March 4, Woolworths moved to apply a quantity limit on toilet paper packs by implementing the purchase limit of four packs per customer, in-store and online. Large packs of rice (2kg and over) is limited to 1 per transaction and hand sanitisers have been limited to 2 per transaction, now sold from the customer service desk.

A spokesperson for Woolworths said it will help shore up stock levels as suppliers ramp up local production and deliveries in response to higher than usual demand.

Coles has also implemented temporary purchase limits and increased deliveries from its distribution centres as “this will help us maintain stock levels in stores while our suppliers increase local production and our distribution centres increase deliveries”.

A spokesperson from Coles said they have ongoing contact with suppliers, government stakeholders and transport partners to determine how best to improve availability on popular products, such as long-life pantry staples and healthcare items.

“While there may be some temporary stock shortages, the vast majority of products in our stores and via Coles online remain available for customers.”

Meanwhile, bulk buy supermarket Costco is restricting customers on purchasing household goods including milk, eggs, rice and disinfecting/soap products across its Australian branches.

Patrick Noone, managing director said Costco has seen an influx of people in warehouses across the country in the past week stocking up and the biggest spike in sales has been centered around foods and sundries.

“Our members are always our top priority, and our employees and suppliers are working tirelessly to try and keep up with demand,” Patrick said.

Queensland University of Technology retail expert Dr Gary Mortimer told NewsCorp that the shortage was exacerbated by the bulky nature of the products and supermarkets’ inability to stockpile them in storerooms.

“Supermarkets are also conditioned to hold small levels of inventory, which is replenished every night,” Gary said to Newscorp.

“A tiny movement on one end of the supply chain has a massive impact on the other end – it was as simple as a couple people walking in on the weekend and buying up, which got everyone involved.”

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