The aftermath of Brexit on the food industry: Interview with Technology Management

Brexit is, without a doubt, creating a wave of insecurities in the food industry. How will food companies be impacted by a no-deal scenario? What will happen to the farmers, the fishers? Will food costs rise? The food industry has all its weaves entangled between the UK and EU supply chains. Meanwhile, British MPs have voted by a majority of one to ask for an extension of the entire process, in an attempt to not leave with a no-deal scenario. We’re discussing the impact of Brexit on the food supply chain with Darran Neary, New Business Sales Consultant at Technology Management, United Kingdom. For 27 years now, Technology Management (known informally as TecMan) has been helping manufacturers and distributors improve their business performances. We’re looking at the different Brexit scenarios in an attempt to get insight into the right decisions food companies have to take in these risky times.

The biggest Brexit hit will be taken by food companies with complex supply chains. Manufacturers and food companies alike will have to be better prepared for whatever is about to happen, be it a hard or soft Brexit. Will we see a shift towards more local produce? Or will this be an opportunity for the UK to look towards the global markets? 

Good question, I suspect this won’t really have much of an effect either way as I cannot see the government or suppliers being so short sighted as to make it prohibitively expensive to do business with Europe post-Brexit. Currency fluctuation will be the biggest impact on this and the cost of doing business. Tariffs will be cut to zero on 87% of imports to the UK as part of a temporary no-deal plan. Fresh produce will most likely be the most effected due to limitations on local supply e.g. oranges and delays at port. Although, lead times may suffer post-Brexit if no agreement is made. Again, this will work itself out quite quickly as it is in no-one’s interest to make this worse than it must be.

When considering risk analysis and planning for uncertainties, how will this shift impact food companies strategic and contingency planning?

Most food companies will be managing risk where possible by offsetting suppliers in Europe vs local ones where possible. As stated above, this will probably amount to very little change. Food companies cannot buy much additional stock, as expiry will be more of an issue than supply issues.

It is expected that the UK farming industry will be hit by a 60% loss of income and competition with EU farmers will pretty much disappear. How will this impact the farming industry?

This will just lead to a change in focus for the farmers from potential loss of market products to local sales products.

Moving on to another challenged topic, the fishing industry. Fish is one of the most regulated and protected industries within the EU. When the UK leaves the EU, they take along their waters and the exclusive rights on selling in the UK. How will the fishing industry deal with these changes?

Most products that are shipped to Europe at present will continue, as these are premium type products. The market in the UK is open to diversity and these products could be sold in home markets. 

In an attempt to close trade deals with foreign countries faster, there’s often talk of weakened food safety standards post-Brexit. Food is mostly regulated by the large EU Food Safety Boards. Can the UK check all sourcing regulations? Will the import of cheaper produce in the UK loosen the food safety standards?

I cannot see how this would happen. Food safety is key to the UK and no way would they let this slide. All EU rules will become UK law post-Brexit.

Food costs rising push onto food suppliers, who then pass these costs onto their customer base. In which case exports could become a viable options. We can already see the results of this with many companies leaving UK for EU or reducing manufacturing. How will these costs impact food companies?

Initially, the cost increase would hit the consumer. This was a similar case when the Euro was introduced years back. At some point, the markets would settle and either exports from UK would increase to non-EU countries or the EU would negotiate trade agreements.


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