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An Award-Winning Finale to Britain’s Biscuit Crisis

In the carefree pre-Brexit, pre-Trump days of early 2016, the story dominating national media was the impending doom of the biscuit shortage.

“Britain’s biscuit crisis gets WORSE as bourbon shortage to last MONTHS” panicked the Daily Express.

The Sun could not resist a pun “Hard to digestive: Britain in the grip of a ‘biscuit shortage’ …”

“How have we coped without biscuits?” sympathised the BBC.

The news, of course, stemmed from the flooding and shutdown of the McVitie’s factory in Carlisle operated by United Biscuits. On 5-6 December 2015, Storm Desmond unleashed a month’s worth of rain, flooding thousands of properties in the North East of the UK. The centre of Carlisle, where the McVitie’s factory has been since 1831, was among the worst hit. The factory is the sole United Biscuits facility producing many of the UK’s best-loved brands – varieties of McVitie’s, Carr’s and Jacob’s biscuits, as well as Custard Creams and Bourbons.

The clean-up and subsequent restart of the factory speaks volumes to the perseverance of the United Biscuits staff. 728 employees, many of whom were also personally affected by the storm, were involved in the emergency response. The mammoth task involved the clean-up of nearly 40 million litres of water and 540 tonnes of debris followed by dismantling, carefully cleaning and reassembling all equipment.

The United Biscuits zeal to get back on track was matched by the assistance provided by their insurers. An adjusting team lead by Vericlaim, and including RGL Forensics, was engaged to provide the much-needed support.

  • ISS, a specialist cleaning company, was engaged, and by the end of week 1 had 50 additional people on site. Over the next few months, some 200 ISS staff worked on site providing invaluable assistance in cleaning the equipment.
  • An online authorisation spreadsheet was set up, allowing United Biscuits to order the replacement equipment with minimal delays.
  • Regular meetings were held alongside Harris Balcombe and Grant Thornton to explore ways to mitigate the business interruption losses and to indemnify United Biscuits for their loss.

By the end of week 8 some 30% of the total insurance payment was made, providing United Biscuits with the financing to get along with the speedy recovery. And the assistance started to pay off:

“Emergency biscuits flown into UK due to national shortage” Independent, March 2016.

Until finally “'Biscuit shortage' factory fully working” BBC, April 2016.

The quick restart of the factory was the first victory, but the battle was far from over. No matter how established your products are, a four-month absence from shelves can only harm sales. The next step was to engage marketing. With the full support of the insurers, United Biscuits embarked on an advertising and promotional drive, which started to push sales to pre-flood levels.

In November 2016, shortly before the one-year anniversary of the flood, the United Biscuits insurance loss was settled to the mutual satisfaction of all parties.

The incredible story of recovery of the McVitie’s factory after the devastating flood and the quality of the insurer’s response were recognised on 5 July 2017 when RSA, Vericlaim, Harris Balcombe and RGL Forensics were awarded the Major Loss Award at the British Insurance Awards, held at the Royal Albert Hall.

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