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