The Businesses Stockpiling For A ‘Disastrous’ No-Deal Brexit

Ted Woodward from the Food and Drink Federation, said: “We believe [a no-deal Brexit] would be disastrous for the UK’s food and drink industry and inflict serious damage on UK food and drink.

“We expect prices will rise, there will be significant shortages of some products, and disruption for shoppers and consumers will be far reaching.”

HuffPost contacted the Food and Drink Federation to get an idea of the stockpiling situation for products with a short shelf life.The FDF is the voice of the food and drink industry, speaking on behalf of global brands and small businesses.

They provided two case studies from among their members, who asked not to be identified in order to protect their business interests from competitors.  

Food and Drink Company 1 – anonymous

A company specialising in meals for older people spent in the region of £5m stockpiling 12,000 pallets to store their frozen and chilled food for the original March deadline.

In the event of another no-deal Brexit, they would need to repeat this, but all the warehouse and storage capacity has already been booked two years ago as the run up to Christmas is the busiest time of year for food and drink.

Chief Executive of the London Chamber of Commerce and Industry Peter Bishop, told HuffPost UK: ”Some members remain dubious about whether the UK’s exit from the EU will actually happen at the end of October.”

Food and Drink Company 2 – anonymous

One producer, which makes the ingredients used in meals for vulnerable people, experienced a record January, February and March of this year – orders were 20 percent ahead of their average, all driven by stockpiling. 

By April they had to resort to sweeping the factory floor to pass the time – business had simply dried up.

At that point they began debating whether to close the factory for a short spell.

Compounding the issue, goods they had stockpiled were bought in at higher than regular prices and will now need to be sold at cost price or a loss, hitting their profits further.

The timing and uncertainty around the Brexit deadline causes a further headache as the business builds production through October, November and December so they can close the factory at Christmas yet deliver the same output.

While they wouldn’t provide any specific details, the FDF did supply information on the types of ingredients that will be hit in the event of a no-deal: 

“Many UK producers risk facing a potentially devastating loss of access to essential ingredients that are not available or produced in sufficient volumes in the UK. 

For example, the UK doesn’t produce sufficient volumes of high protein wheat to meet the needs of the UK’s bread bakers. The continued availability of bread on shelves depends on timely arrivals of just-in-time imports from Germany and France.

We also do not have sufficient processing capacity to supply milk powders for use in manufacturing of products such as infant formula, chocolate and confectionery.”

Back in the world of politics, Downing Street reiterated on Monday that Boris Johnson remains “very clear in his determination to want to get a deal” and said he will hold talks with EU leaders over the phone in the coming days.

The statement came as it was reported the PM’s plans could be blown off course early next month after a judge agreed to fast-track a hearing on whether he can legally suspend Parliament to force through a no-deal exit.