As the United Kingdom nears exit from the European Union without an agreement, there is a wave of increasing anger from food retailers. This rage is due to the demand for stockpile food in preparation for the chaotic economic impact it is expected to bring.
Supermarkets rose in anger and clarified that it is not right to put the blame on these companies when people could not find kitchen ingredients they would like to buy.
With the unpredictable political climate imposed by the no-deal British exit, known as ‘Brexit,’ food and drug industry are prompted to realign their logistical operations. It is imperative to do so, once the appearance of custom checks clog the supply chain, delays ports, and slows down of food transport.
The food market has disclosed that their stock filings could only go a little further. Bosses have expressed disbelief to Michael Gove, the government personnel in charge of the Brexit no-agreement initiative. They showed discontent when he promised that it is impossible to have fresh food shortage this month as Britain gets out of the EU without a deal at the end of October.
Amid the uncertain working conditions, food industry owners are aware of expensing a hundred million pounds again as the government fastens up Britain’s exit from the union.
Justin King, the former CEO of Sainsbury’s (SBRY.L), said, “The government is apparently attempting to talk to a narrative with the companies.
“If they only prepared properly, they can cope up and it’s the companies fault if they haven’t,” he added.
King, the current director of Marks & Spencer, added, “There are delays as the day goes by when 50% of trucks; there will be gaps on the shelves inside seven days”.
One marketing chief at Britain’s four supermarkets giants, that consists of Tesco (TSCO.L), Asda (WMT.N), and Morrisons (MRW.L) shared another statement. He said that the state was increasingly making the industry as an ‘extended arm’ of the government.
“The basic question is, who will be responsible for providing food for the UK in the case of a blockade?” he said pinpointing to anonymous ideals.
Making reasonable steps to protect our business from the effects of Brexit is arguably their responsibility, he clarified.
However, when the steps companies take to feed the nation comes into play, he posited, “that starts to move us out of reasonable steps”.
On the other hand, the Department of Environment, Food and Rural Affairs made sure to meet the food industry and retailers regularly. They uphold the toughness of the UK’s supply chain from the effects of the Brexit.
The department clarified that they “…have a highly-resilient food supply chain and consumers in the UK have access to a range of sources of food. This issue will continue to be the case when we leave the EU on October 31, whatever the circumstances”.
The main port of Dover, as Gove pointed out, reflects a material risk to the economy but can be mitigated and loosened up when companies have an essential customs declaration. He also added that scarce resources in the product line may result in a price increase but is unlikely to drive to a wide-scale shortage of items.
“We have to be ready for the consequences,” he said, “there is no good time of the year to leave the European Union.”
No-deal Brexit once was known to be an unlikely political nightmare, slowly comes into reality as Prime Minister Boris Johnson pledged to pull Britain out of the EU if needed.
A looming election shows that we should take nothing for granted; opposing parties are hampering the exit with a few attempts for a delay.
The UK, which relies heavily on imports, faces a significant challenge, especially during autumn, when the warmer climate is needed to grow some fruits and vegetables. A detachment from the EU without agreement may affect the food industry.
According to the British Retail Consortium (BRC), by the end of October, the EU provides some 86% of lettuces, 70% of tomatoes, and 27% of soft fruits. Typically, the UK buys around half of its food, only a third coming from the EU.
Additionally, the food grown in North Africa has to go through Spain, which imposes another challenge to the UK.
“I don’t believe there is any risk that the UK will go hungry,” said the senior supermarket official. “The question is: will the UK be able to eat what it wants to eat in terms of fresh food?” he added.
The most significant trend in the timing of the Brexit is its coincidence with the busiest shopping season during autumn, Christmas. It is when retailers fill up warehouses ahead for the expected high-demand season.
Britain’s biggest retailer has stockpiled over 200 million pounds worth of long-life goods, according to Tesco boss, Dave Lewis. It was initially allocated for the initial Brexit deadline in March but will struggle to do this again. The reason is that millions of mince pies, hams, and cheeses already sit in stock houses.
With expected delivery delays, it is challenging to stockpile fresh food because they would quickly wilt even before reaching the market. The official added that these products might be marked for final sale as soon as they arrive in some stalls.
Even with the rise of turmoil, currently the number one grocer, Tesco expects to hold its strong market leadership. Now, Tesco has a 27% market share, a workforce of 320,000, and a sourcing base all over 50 countries.
Sainsbury, on the other hand, boasts its higher proportion of cucumbers, tomatoes, and peppers. Morrison highlights its food sourcing independence for half omits products. Asda shelters and ties itself with the shadows of Walmart, the world’s biggest retailer.
These significant supermarkets, however, declined to disclose their Brexit preparation expenses as well as their readiness for the said no-deal exit.
Even months before the rise of the Brexit attempt, food manufacturers, dealers, and retailers are puzzling over the most effective way to minimize the effects of this political climate. These supermarkets are trying to modify their already honed system to fit the new needs of delivering fresh goods to stores at the right time and in the most cost-effective manner.
They pass the pressure to the extensive warehouse and transportation services, who face port delays that affect the entire backbone of the food network of the UK. With this, Jonathan Barker, executive director of Lineage UK, the world’s largest temperature-maintained logistics firm, said that his sites are reaching their maximum capacity.
With 37 years of logistics experience, he posited that the entire system began shaking even months before the March deadline. Some food deliveries are already failing as they struggle to stock and move loads before expiry.
He said, “it could be worse this October, the last Brexit deadline, we were coming out of a relatively quiet period.”
” This is slap bang in the busiest time of year,” he highlighted.
BRC also said that the supermarkets are now switching to longer life vegetables such as carrots and potatoes to fill in the empty shelves in this period of uncertainty.
Andrew Opie, a director of BRC lobby group, said, “If your competitor is doing better than you then the consumer will walk.”
He humorously said, ” one of the key items that all consumers look for is tomatoes. If you can’t see it, you think the even depleted the whole store.”