UK grocers, fast food warn of major disruption from no-deal Brexit

By James Davey LONDON (Reuters) - 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 said on Monday. 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 bosses of the Co-operative, Marks & Spencer, Lidl and Waitrose supermarkets, was published before key Brexit votes in Parliament set for Tuesday.

Reuters January 29, 2019 00:06:00 IST
UK grocers, fast food warn of major disruption from no-deal Brexit

UK grocers fast food warn of major disruption from nodeal Brexit

By James Davey

LONDON (Reuters) - 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 said on Monday.

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 bosses of the Co-operative, Marks & Spencer, Lidl and Waitrose supermarkets, was published before key Brexit votes in Parliament set for Tuesday.

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 bosses 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."

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.

(Reporting by James Davey; additional reporting by William James; Editing by William Schomberg, Peter Graff and Andrew Heavens)

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