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UK supermarkets preparing for a hard Brexit: Stockpiling not viable

30 January 2019, at 12:00a.m.

UK - Supermarkets and food chains issue warning that Brexit could seriously disrupt food supplies

Britain's food supply could be seriously disrupted if it leaves the EU without a deal, a lobby group representing Sainsbury's, Asda, McDonald's, KFC and other firms have announced.

Problems would be particularly acute around March, when Britain is scheduled to quit the bloc, and when most of its produce from lettuces to tomatoes is out of season, with a higher percentage imported, the British Retail Consortium (BRC) added.

The statement, also signed by the exec of the Co-operative, Marks & Spencer, Lidl and Waitrose supermarkets, was published before key Brexit votes in Parliament set for today (29 January, 2019).
Responding to the BRC's letter, a spokesman for Prime Minister Theresa May said plans were in place to keep customs working and traffic flowing in the event of a hard Brexit. Food security was high and that would "continue to be the case whether we leave the EU with or without a deal,” he said.

The exec said in the letter they had been making contingency plans with suppliers but "it is not possible to mitigate all the risks to our supply chains and we fear significant disruption in the short term as a result if there is no Brexit deal.

"We are therefore asking you to work with your colleagues in Parliament urgently to find a solution that avoids the shock of a no-deal Brexit on 29 March and removes these risks for UK consumers."

Reports emerged throughout 2018 of supermarkets planning for a no-deal Brexit and it came to light that Aldi was indeed considering stockpiling food. However, other supermarket bosses came forward and expressed that only stockpiling of dry foods would be possible in this scenario.

In an interview with The Daily Mail, the British Retail Consortium said in July:

"Stockpiling of food is not a practical response to a no-deal on Brexit and industry has not been approached by Government to begin planning for this.

"Retailers do not have the facilities to house stockpiled goods and in the case of fresh produce, it is simply not possible to do so.

"Our food supply chains are extremely fragile and this is yet further demonstration of the need for an agreement on the backstop to ensure frictionless trade is maintained after the 29 March 2019."

Out of season

The BRC letter said that nearly one third of the food eaten in the UK came from the EU, and in March 90 percent of Britain's lettuces, 80 percent of its tomatoes and 70 percent of soft fruit was sourced from the bloc.

"As this produce is fresh and perishable, it needs to be moved quickly from farms to our stores," it said. "This complex, ‘just in time’ supply chain will be significantly disrupted in the event of no deal."

The letter quoted what it said was the UK government's own data suggesting freight trade between Calais and Dover may reduce by 87 percent against current levels as a result.

"For consumers, this will reduce the availability and shelf life of many products in our stores," it said.
The BRC added that higher transport costs, currency devaluation and tariffs could push up food prices.

Only around 10 percent of Britain's food imports are currently subject to tariffs. If the UK were to revert to WTO Most Favoured Nation status in a no-deal scenario, it would greatly increase import costs, which could in turn put upward pressure on food prices, the BRC said.

It said the UK could set import tariffs at zero but that would have "a devastating impact" on Britain's farmers, a key part of the supermarkets' supply chain.

The signatories said they were stockpiling where possible, but noted that all of Britain's frozen and chilled storage is already being used, with very little general warehousing space available.

They said it is impossible to stockpile fresh produce with supermarkets typically storing no more than two weeks’ inventory.

As reported by James Davey. Additional reporting by William James. Reuters.
Additional sources: The Daily Mail; Manchester Evening News; I News

Editor at The Poultry Site

Ryan worked in conservation from 2007-2017, during which time he operated a rainbow trout hatchery in Canada for the Toronto and Region Conservation Authority. As editor of The Poultry Site, he now writes about challenges and opportunities in the global poultry industry and agri-food chain.

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