Food firms warn of no-deal shortages and price hikes

Consumers could face availability issues and higher prices, major retailers and foodservice businesses have warned.

Companies including Sainsbury’s, Asda and Pret A Manger have a signed a letter to MPs highlighting their concerns about the potential impact of a no-deal Brexit on food supply, and urging politicians to find a solution that avoids this happening on 29 March.

They flagged up that, in March, 90% of lettuces, 80% of tomatoes and 70% of soft fruit were sourced from the EU and needed to be moved quickly from farms to stores.

“This complex, ‘just in time’ supply chain will be significantly disrupted in the event of no-deal,” stated the letter. “Even if the UK government does not undertake checks on products at the border, there will still be major disruption at Calais as the French government has said it will enforce sanitary and customs checks on exports from the EU, which will lead to long delays.”

This, in turn, will reduce availability and the shelf life of many products in stores, the signatories have claimed.

Business have been stockpiling where possible, but all frozen and chilled storage was already being used, according to the letter, and there was little general warehousing space available in the UK.

“Retailers typically store no more than two weeks’ inventory and it becomes difficult to restock stores if the supply chain is disrupted. We are also attempting to find alternative supply routes but there are limited options and not enough ferries, so this could only replace a fraction of the current capacity.”

Another major concern is the impact of tariffs as only 10% of food imports are currently subject to tariffs, but if the UK reverts to World Trade Organization (WTO) Most Favoured Nation status – which is expected in the case of no-deal – this would ramp up import costs and put upward pressure on food prices.

“We are extremely concerned that our customers will be among the first to experience the realities of a no-deal Brexit,” concluded the letter. “We anticipate significant risks to maintaining the choice, quality and durability of food that our customers have come to expect in our stores.”

The BRC letter was signed by:

  • Mike Coupe, chief executive, J Sainsbury plc
  • Roger Burnley, chief executive, Asda (Stores) Ltd
  • Steve Rowe, chief executive, Marks & Spencer plc
  • Jo Whitfield, retail chief executive, The Co-op
  • Rob Collins, managing director, Waitrose
  • Darcy Willson-Rymer, chief executive, Costcutter Supermarkets
  • Paula MacKenzie, CEO, KFC UK&I
  • Clive Schlee, chief executive, Pret A Manger
  • Christian Härtnagel, chief executive, Lidl
  • Richard Pennycook, chairman, British Retail Consortium
  • Helen Dickinson, chief executive, British Retail Consortium
  • Paul Pomroy, chief executive, McDonald's Restaurants Ltd

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