No-deal “could inflict mortal damage on UK food and drink,” warns FDF as Britain gets new prime minister

24 Jul 2019 --- The UK Food and Drink Federation (FDF) says a no-deal Brexit “will inflict serious and – in some cases mortal – damage on UK food and drink.” The warning comes as Britain’s new Prime Minister Boris Johnson, who yesterday won the conservative leadership race, says he wants to renegotiate with the EU to deliver Brexit but also pledges Britain will leave on October 31 “do or die.” This means a no-deal exit will happen if no agreement has been reached, which is escalating concerns for businesses across the supply chain.

FDF Chief Executive, Ian Wright, says a no-deal Brexit would destroy the opportunities to make the country’s £4 billion (US$4.9 bn) food chain the most dynamic, sustainable and competitive in the world, as detailed in the industry's recently published “Plan for Success.” 

The plan shows how, working in partnership with government, the industry can boost exports, develop talent and encourage innovation, notes Wright. “A no-deal Brexit would destroy that opportunity and much more. Prices will rise, there will be significant shortages of some products, and disruption for shoppers and consumers will be far-reaching,” he says. 

“We urge the new Prime Minister and government to work with us to deliver a withdrawal agreement that guarantees the closest possible trade and regulatory relationship with our nearest neighbors so UK food and drink can flourish.”

Wright also points out that the UK’s largest manufacturing sector, food and drink, is central to the country’s critical national infrastructure and employs more than 450,000 people across the nation. UK food and drink is globally renowned for its quality, provenance and taste, he stresses. 

Having been elected as new Conservative leader in a ballot of party members, Johnson said: “We are going to get Brexit done on October 31 and take advantage of all the opportunities it will bring with a new spirit of can do.”

The UK’s food and drink industry has been critical of a no-deal for many months, urging the government to avoid it at all costs. 

An FDF spokesperson also tells FoodIngredientsFirst how manufacturers have done as much as they can to prepare for a no-deal Brexit given the often limited information provided by Government. "Businesses have adapted supply chains, sought alternative sources of ingredients and where possible adapted recipes to give themselves the best chance if trade with the EU grinds to a halt," they said. "Companies may have confidence in their own preparations for a no-deal, but all are dependent on the next person in their supply chain, or even the next lorry in the queue at the port having done as much preparation as them and crucially not making mistakes."

"Stockpiling plays a role in these preparations but the ability to do this is limited by the availability of hygienic storage, the shelf life of ingredients and access to capital to fund these additional investments. In an industry that is 97 percent made up of small businesses, stockpiling will only have a limited impact. There are still areas we need clarity from Government on, we are still waiting for Government to respond to our 40 no-deal questions we put to them in May."

The FDF is seeking four key outcomes for the industry in terms of a deal being reached: frictionless, tariff-free trade that maintains the same market access with the EU and it’s FTA partners; access to a valued EU workforce; a stable regulatory regime; and no barriers to trade between Ireland and the UK.

They are not the only industry to be concerned as Britain heads towards the October deadline. 

Retailers voice concerns on “broken business”
It would be extremely difficult for retailers to contain prices if the UK were to leave the EU without a deal, Helen Dickinson, Chief Executive of the British Retail Consortium, warned earlier this month. The UK food and retail industry is also enormously susceptible to the trading challenges that a no-deal Brexit presents – something which industry has dubbed a “looming catastrophe.”

However, responding to Johnson’s appointment, the BRC said yesterday: “There are many pressing issues in retail and the wider economy, such as rising costs and weakening consumer demand, and we look forward to engaging with Mr Johnson and his team to promote constructive solutions to these issues.”

 “Retailers employ three million people across the UK, making the industry the UK’s largest private sector employer, and the burden of business rates and other public policy costs put these jobs and our high streets at risk. With retail conditions the toughest they have been for a decade, the new Prime Minister must act to support the successful reinvention of retail locations and local communities. We hope the new Government will commit to a full review of the broken business rate system and to collaborate with the BRC on a strategy to bolster the retail industry during this time of rapid change.”

As the initial reaction to Johnson becoming Britain’s Prime Minister dies down, the coming weeks present a huge challenge and will raise questions about whether this new premier means a new Brexit plan between the UK and Europe. 

By Gaynor Selby