Wood v plastic: CHEP loss is 'revolutionary' rival's gain

Brambles dismisses concerns despite losing major pallet contract to rival promising to "revolutionise" distribution

Brambles has dismissed market concerns over its business, despite losing a major pallet supply contract in the United States to a rival promising to "revolutionise" supply chain operations.

Brambles has confirmed the loss of a contract supplying beverage giant PepsiCo, which was using CHEP pallets for its Quaker, Tropicana and Gatorade business units.

From April 1 PepsiCo will begin converting those pallets to new supplier iGPS, which markets a plastic pallet with radio frequency identification (RFID) tracking.

Some analysts suggest CHEP’s wooden pallets could struggle to compete against the plastic alternative, claimed to be fire-retardant with a lower burn index than wood pallets.

Responding to a sharp decline in its share price yesterday, Brambles says in a statement the contract does not impact CHEP’s other business with PepsiCo in the US and around the world.

FOR MORE: www.chainmail.com.au

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