UK supermarkets are frustrated with the government’s demands to stockpile food in case of a no-deal Brexit – and bosses say they should not be blamed if crashing out leads to shortages.
With British politics spiralling towards an unpredictable endgame, food and drugs manufacturers are having to rethink operations in case customs checks shatter supply chains, clog ports and delay deliveries.
The food industry has warned that stockpiling can only go so far, and bosses have expressed incredulity at Michael Gove, the minister in charge of no-deal Brexit planning, who vowed this month that there would be no shortages of fresh food if Britain leaves the EU without an agreement on 31 October.
Already burned twice by the government delaying supposedly steadfast Brexit deadlines, the industry is wary of spending hundreds of millions of pounds again when the outcome is so uncertain.
“There is a clear attempt [by government] to talk to a narrative which is that companies, if only they prepared properly, would be able to cope and it’s companies’ fault if they haven’t,” said Justin King, who was CEO of Sainsbury’s for 10 years and is now a director at Marks & Spencer.
“As night follows day, if 50 per cent of lorries are delayed there will be gaps on the shelves inside seven days,” he told Reuters.
A senior executive at one of Britain’s big four supermarkets, a group that includes Tesco, Morrisons and Asda, said the government is increasingly treating the industry as an extended arm of the state.
“The fundamental question, is whose job is it to provide food for the UK in the case of a blockade?” he said, speaking on condition of anonymity.
“Taking measures to reasonably protect our business from the impact of Brexit is our duty. When you start to say, ‘What is your business doing to feed the nation’ – that starts to move us out of reasonable steps.”
In an emailed statement, the Department of Environment, Food and Rural Affairs said the UK had robust supply chains across a range of countries and was meeting retailers regularly to make sure they were fully prepared for Brexit.
“We have a highly-resilient food supply chain and consumers in the UK have access to a range of sources of food. This will continue to be the case when we leave the EU on 31 October, whatever the circumstances,” the statement said.
Mr Gove told parliament on Thursday that delays at the main port of Dover were a material risk but all would run smoothly if companies had the necessary customs declarations. While scarcity of some product lines may push up prices, there were unlikely to be full-scale shortages, he said.
“There is no good time of year to leave the European Union without a deal,” he said. “However, we have to be ready for the consequences.”
No-deal Brexit – once considered the industry’s nightmare scenario at the extreme edge of probability – is now looking ever more possible after the prime minister vowed to take Britain out of the EU without an agreement if necessary.
While opposition parties are trying to force another delay, a looming election means nothing can be taken for granted.
That marks a major challenge for a food industry that relies heavily on imports from Europe during the autumn when warmer climes are needed to grow some fruit and vegetables.
Britain normally buys in around half of its food, with about a third coming from the EU – but by the end of October, the bloc provides some 86 per cent of lettuces, 70 per cent of tomatoes and 27 per cent of soft fruit, according to the British Retail Consortium (BRC).
Food grown in North Africa also comes through Spain.
“I don’t believe there is any risk that the UK will go hungry,” said the supermarket executive. “The question is, will the UK be able to eat what it wants to eat in terms of fresh food?”
Autumn is also when retailers fill their warehouses ahead of the year’s busiest shopping season – Christmas.
Tesco boss Dave Lewis has said that the store stockpiled over 200 million pounds worth of long-life goods by the original Brexit deadline in March, but will struggle to repeat that due to the millions of mince pies, hams and cheeses that already sit in warehouses.
Fresh food can’t be stockpiled and border delays of a few days would wilt such produce, meaning it could be put on final discount almost as soon as it arrives in store.
Tesco, with the top grocery market share of 27 per cent, a workforce of 320,000 and a sourcing base of over 50 countries, expects to hold its own alongside rivals.
Sainsbury’s buys a higher proportion of cucumbers, tomatoes and peppers from Britain than others, Morrisons makes half of all its own brand and fresh food and Asda benefits from being part of Walmart, the world’s biggest retailer.
The major supermarkets have declined to reveal how much they are spending on Brexit preparations or their state of readiness for a no deal.
Ahead of the deadline, manufacturers, suppliers and retailers are trying to unravel a system honed over decades that delivers fresh and non-perishable goods to the stores just in time for sale, and in the most economically efficient way.
The need to build up stocks – to mitigate for any delays at ports – is putting pressure on the vast warehouses that form the backbone of Britain’s food network. Jonathan Baker, executive director at Lineage UK, the world’s largest temperature-controlled logistics firm, said his sites are at maximum capacity.
Working in the industry for 37 years, he said the whole system started to creak before the original March deadline, with some food deliveries failing as logistics providers struggled to extract goods on time from warehouses filled to the brim.
“It could be a lot worse in October,” he said. “The last Brexit deadline, we were coming out of a relatively quiet period, whereas this is slap bang in the busiest time of year.”
With so much uncertainty in the air, supermarkets are asking suppliers to hold more stock, and are likely to source more longer-life vegetables such as carrots and potatoes to avoid empty shelves, according to the BRC.
“If your competitor is doing better than you then the consumer will walk,” said Andrew Opie, a director at the BRC lobby group. “One of the key items that all consumers look for is tomatoes. If you can’t see it, you think the whole store is somehow depleted.”
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