Salting it away: The suppliers cashing in as Britain grinds to a halt
As stocks deplete, councils are turning to table salt – it's cheaper
Sunday 08 February 2009
For the next few days at least, it will be one of the most sought-after commodities in Britain. Boosted to 400 per cent of its usual value, salt suddenly seems as rare as gold dust amid the scramble to keep roads clear of snow and ice. Everybody wants it and the usual supply has fallen to a trickle, so those versed in the laws of supply and demand will not be surprised to learn that the profiteers are moving in.
A mine in Germany has started offering rock salt at more than £100 a ton, or four times the usual market price, according to UK councils. Accusations may also be levelled at Spain as shipments of some 40,000 tons from a mine there could be sold off to the highest bidder.
And even our own British Salt, which makes the table variety, has been accused of "trying to take advantage of a sticky situation" by local authorities, after apparently seeking to turn a 100,000-ton pile of salt considered unfit for human consumption, which has built up over the past 15 years, into £4m.
One council's apparently barmy decision to buy table salt – thought to sell for about £95 a ton – now looks eminently sensible with rock salt actually costing more on the open market.
Edmund King, the president of the AA, said such high prices could result in deaths on the roads. "It does appear to be profiteering and that could endanger lives," he said. "If local authorities are only buying half the quantities they need, that actually means some roads, some pavements, are going untreated due to the cost, which is potentially putting lives at risk." He said AA Insurance had already seen a "quite remarkable" 100 per cent increase in accident claims compared with a normal week in February. Problems sourcing enough salt meant some roads were "death traps", he said.
West Sussex County Council said it had bought about 1,600 tons of rock salt from a German mine for £85 a ton – compared with the usual cost in the UK of about £25 to £30. It asked about buying more, but decided against doing so when told the price had gone up to more than £100 a ton. Such is the concern to protect supplies, a senior West Sussex official refused to say where the boat from Germany was due to dock for fear of being gazumped.
Normally some 90 per cent of the gritting salt used in England and Wales is provided by Salt Union's mine in Cheshire, but it has been unable to meet demand caused by the worst winter for nearly 20 years despite operating 24 hours a day. The rest usually comes from Cleveland Potash, which is bringing in extra supplies from its sister mine in Spain.
Both Salt Union and Cleveland Potash refused to reveal their prices, saying this was commercially sensitive information. A spokesman for Cleveland Potash left open the possibility that the Spanish consignments would be sold to the highest bidder rather than supplied under existing contracts. "I couldn't tell you whether it's going to long-standing customers or whether it's being sold off," he said.
British Salt said its phone had been "on fire" since it became known on Thursday that it had 100,000 tons of salt. Rob Jones, the firm's managing director, did not confirm the £40 a ton price but said that figure "doesn't sound out of this world". He denied any profiteering, saying: "We're not geared up to supply this material. We have to hire in additional equipment, additional labour. Obviously we'll make something on it, but that sort of material has cost quite a lot of money to make."
However, a Local Government Association spokesman said: "There are a lot of grumpy councils saying these people are trying to take advantage of a sticky situation. Sounds like British Salt think they are on to a winner." The LGA and industry body the Salt Association traded verbal blows over the crisis, with the association saying Salt Union had previously said it was capable of supplying 100,000 tons a week. "When all this is over – and I don't think we are anywhere near out of the woods – there will be lessons learned," an LGA spokesman said. "I don't think anyone can accept we can rely on one salt manufacturer. There is only one company that has a salt mine, Salt Union, who have been reported as saying they are working flat out producing 30,000 tons of salt a week."
Peter Sherratt, general secretary of the Salt Association, said it had warned councils last autumn to "stock up properly". He added: "The problem is that with climate change everybody thinks that means we won't get any more winters. Of course, that's been shown to be a lie." He said Salt Union had been able to supply 100,000 tons a week from its stores until those ran out.
The Highways Agency, under an agreement reached with central and local government, yesterday started giving councils some of its dwindling salt stocks – it has just a few days' worth left – and all new supplies are to go to the authorities that need them most, rather than the Highways Agency. The cold weather, which could cost retailers up to £8bn in lost business by the end of this week, is expected to continue for several days at least.
Met Office forecaster Byron Chalcraft said up to 20cm of snow was expected to fall today in much of the country north of the M4, with rain further south. Tomorrow is expected to see the return of snow to the south of England along with gale-force winds.
Snow showers are likely to continue for much of the week, particularly on Wednesday. However, Mr Chalcraft added: "There are some signs we may be heading into milder weather by the end of the week."
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