By Trystan Manning
Brexit. The issue regarding how the UK should negotiate with the EU has been an ongoing story since the referendum. Experts continue to analyze the impact of a limited or “no-deal” Brexit and what it would mean for those living in the UK. An increasingly pressing issue that is only just now reaching the attention of the media is the possibility of a massive food shortage striking the UK. This would be a result of an insufficient or non-existent trade deal. And with our international trade secretary recently conceding that the UK has a “60-40” chance of exiting the EU with no deal, consumers are left wondering what this means for grocers as well as themselves.
Why not stockpile food?
Initial statements by ministers were that their plan was to make preparations for stockpiling an “adequate amount of food supplies”. Theresa May said the public should find “reassurance and comfort” in the stockpiling of food during an interview on the topic. This is impossible. The supply of food imported into the UK is under a “just-in-time” operation, meaning that it enters the country and is instantly supplied and put up for sale for the consumer to buy. Because of this system grocers and their suppliers have little storage space for their food, and the capital necessary to avoid a food shortage is extremely costly and impractical. According to the British Retail Consortium, the United Kingdom imports 10,000 containers of food daily and 50,000 tonnes of food in total. The expectation that companies could store this enormous amount of goods while trade deals are being performed is unreasonable. When Shane Brennen, the CEO of the Food Storage and Distribution Federation (FDSF) discussed the notion that the government could simply stockpile food, he dismissed it as a red herring. Even David Raab, the Brexit secretary stated that the government will not partake in any stockpiling. You get the point, the stockpiling of food to counteract import delays cannot happen. So, what isgoing to happen? And what are companies doing to prepare?
The government alone cannot plan for this transition in supply chain, instead every farmer, manufacturer, supplier, and retailer must have their own plan where collaboration is necessary. The corporations set to be impacted the most by a no-deal Brexit are grocers, and as time passes they are now recognizing the dilemma at hand. Mike Coupe, the CEO of Sainsbury’s, said “The impact of closing the borders for a few days to the free movement of food would result in a food crisis the likes of which we haven’t seen.”. While the statement may sound dramatic, it is accurate and now other grocers are searching for the best course of action. Aldi emailed their suppliers asking for an in-depth overview of how a no-deal Brexit would affect them. This included a 15-question spreadsheet asking for a breakdown of packaging materials and ingredients entering from the EU, as well as information on WTO tariffs and how many EU workers are staffed in their process. The likes of Tesco and Asda have also issued their own warnings about tariffs raising prices, and the possibility of food rotting at the border.
The major grocers recognize the problem their industry is facing, however their specific procedures for handling this shortage are being kept in the dark. One interesting result of a no-deal Brexit would be the heightened competition between the big companies as to who can handle the shortage of food the best. They can either choose to coordinate with each other for an overarching plan or take individualized approaches that may benefit each of them in differing ways. One possibility could include companies or the government investing into UK farms, but establishing a greater holding would be expensive. Another would be to look at countries outside of the EU and start subsidiary enterprises in places like Africa, which some horticulture companies are already doing. Other than these ideas, one can only theorize the steps they are taking to combat this imminent threat and hope that the consumer doesn’t face extensive consequences.
How will this affect me?
The United Kingdom imports 51% and 60% of its processed and unprocessed food respectively. In terms of specific produce, the UK produces about half of its vegetables and only 15% of fruits. Based on the foods that are most vulnerable, consumers can expect to have difficulties with fresh produce, pork, and potatoes. These shortages could make it difficult for consumers to maintain a healthy diet and force them to search for alternative foods. The UK may also have to abandon the current food safety rules to avoid food delays at the border. This represents an accompanying problem regarding food delays. Highly efficient supply chains are also highly fragile and port officials have suggested that an extra two minutes for trucks to get through customs at Dover could lead to 17 mile traffic jams. Small time delays can have immense implications on comestible goods.
Brexit also has the potential to disturb food manufacturing within the UK since EU migrant workers provide up to 40% of labour. The percentage soars to 95% when looking at EU pickers, which is why the government is currently seeking to fill these positions by assisting job center advisors in encouraging British workers to fill these roles. The shortage of EU migrant workers is already taking effect as some home-grown fruits have already been forced to rot due to a lack of labourers. The burden that results from these shortages in food and labor will fall onto the consumer. The prices of many products will rise, so it is up to the people to prepare for this price hike in whatever way they can. Aside from growing your own food, you can still stock up on products for yourself and find locations that offer locally sourced produce. While the thought of preparing for a major food shortage is alarming, this would all only be necessary if we do not have an appropriate exit plan with the EU.
The Easy Outcome
Overall, the best plan to avoid a major food shortage is simply to come up with one. The doomsday scenario of a major food shortage that bruises retailers and pressures consumers can only happen if a departure with no trade deal takes place. Particular issues that must be addressed include a system for customs to avoid delays, a measured approach for vendors and suppliers to maintain deals, and an established workforce that can sustain the UK’s production. A great deal of work must be done before March next year, but as long as a plan is in place then the worst fears should not be realised.