Increasing costs of getting food and goods to the islands have sent shockwaves through the Uist and Barra community sparking fears the local economy will come under strain.
Attention is turning to the wider impacts amid claims DFDS has hiked freight prices at “exorbitant rates" to its customers in the Western Isles.
Increased costs of taking goods into Uist affects not just retailers but hotels, B&Bs , crofting suppliers and other businesses who already work on tight margins, so “we then have to increase our prices or cease trading with the suppliers said Donna Hogg who runs Lovats supermarkets in Uist and Benbecula.
Shops “can’t afford” to continue absorbing additional costs and wrestle with reduced margins.
Consequences of higher freight prices will extend beyond retailers fears Ms Hogg.
She warns the outcome will increase the cost of living in the islands and countermand attempts to tackle depopulation.
“This has to get sorted, its a killer for the island,” she added.
“We are trying to encourage people to move to Uist and stay here but with a higher cost of living we could lose a lot of people in a short period.”
She continued: “Keeping our communities thriving is difficult in the islands, but I feel we have been doing pretty well this past 37 years.
“Alas all it takes is one haulage company with the monopoly to destroy our islands.”
A raft of small businesses in Uist say they are struggling to absorb the cost of
deliveries from Danish-owned DFDS , the dominant transport company in the islands
with a fleet of tracks in Lochmaddy and Stornoway - since it took over the logistics
business of DR Macleod in 2023.
DFDS has also captured the market for freezer and refrigerated foods.
The company is tackling more expensive circumstances in its Western Isles operations and increased delivery prices last month to “ensure economic viability,” following a “fundamental restructuring” of operations after it lost a major line of trade with the Bakkafrost Marybank fish factory closedown preceded by a slowdown of salmon exports off Lewis.
DFDS says it has engaged with Scottish Government, Highlands and Islands Enterprise, Transport Scotland and CalMac to highlight the impact on services to the Western Isles.
Four mainland suppliers recently told Lovats that they are forced to pass on the latest price rise in sending them groceries and perishables.
This is not “what I wanted for the start of 2025. The last thing I want to to tell customers is ‘sorry but we have to put the prices up,’” said Donna Hogg.
There’s “nowhere else to go” to transport chilled and frozen food, she added.
The latest blow came on Friday when her shops had no choice but to drop a valued
supplier - a small family run diary on Gigha - due to “unrealistic haulage hikes
from DFDS” which would have dramatically increased the shelf price of the whole milk
to customers.
“With great regret, we have had to cease trading with Wee Isle Dairy as we cannot justify selling their amazing milk at £5 per one litre bottle,” said Ms Hogg.
Significant delivery charges to the islands are “unfair and contributing to the downfall of our island economies,” emphasised one island hotel operator.
“Whilst recognising that nationally many businesses are struggling hence supplier and transportation price hikes, it inevitably creates the endless roundabout effect where we all are going round in circles having to reluctantly do likewise.
“Unfortunately, it’s front line businesses that bear the brunt of the negativity from customers not realising the level of increases being thrown at us. It’s not easy and it’s our way to survive.
“There is a significant lack of a wider understanding of the issues and support for businesses. The long term impact for the islands is concerning.”
A Uist based enterprise said: “We've had to resort to buying our own van and will now be forced to travel to Glasgow to pick up our own stock. The alternative is to cease trading.”
Am Politician pub on Eriskay said they are having the “exact same problem” with companies adding huge delivery charges to products because “DFDS have put the charges onto them. For some of our suppliers it means we can no longer use them.”
Alasdair Allan MSP said: “It is very frustrating that DFDS are continuing to hike prices at such exorbitant rates, which are completely unaffordable for island businesses and customers.
“I met with the company about their huge rates increases last year when they first
began operating locally and they gave assurances that the rises at the time were
short term and were 'corrections' to previous undercharging - this does not seem
to be the case and I will be contacting them again on this along with Scottish Government
colleagues.”
The MSP urges affected local businesses to get in touch with specific examples of the prices rises and the impact on their firm.
Skyrocketing freight costs risk savage ramifications for Uist economy warn local businesses
17 January 2025
