The buyer's burden

11 January 2011
Lindsay Clark, international news editor, Supply Management“Inflation is back”, the Financial Times declares today. This may not be news to anyone buying petrol, where prices have risen by 37 per cent in the UK since 2007, but it does suggest a more pervasive and enduring economic condition. What may concern UK buyers, though, is the cause of inflation. For commodities, strong demand from China and the Far East is a looming factor. When local and regional conditions remain uncertain, as they do in the UK, parts of Europe and the US, strong demand from elsewhere presents a particularly prickly problem. It means there will be cost rises which will be difficult to pass on to customers because local demand will not permit it. So it might be time for a charm offensive. If the best you can do is to avoid the worst cost increases, rather than actually reduce costs, now is the opportunity to get your excuses, sorry, justification, in first. Like The Godfather’s Don Corleone, finance directors tend to insist on hearing bad news immediately. Let’s hope they don’t shoot the messenger.
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