Stockpiles of tomatoes? UK retailers bristle at demands of no-deal Brexit

September 9, 2019

A British demand for supermarkets to prepare for a potentially chaotic no-deal Brexit by stockpiling food is stoking anger in the industry, with bosses saying they should not be blamed if people can’t find everything they want on the shelves.

With British politics spiralling toward an unpredictable endgame, makers of food and drugs are having to restructure operations in case the arrival of customs checks shatters supply chains, clogs ports and delays deliveries.


The food industry has warned that their stockpiling can only go so far, and executives have expressed incredulity at Michael Gove, the minister in charge of no-deal Brexit planning, who vowed this month that there would be no shortages of fresh food if Britain leaves the EU without agreement on Oct. 31.


Already burned twice by the government delaying supposedly steadfast dates for Britain’s exit from the EU, the industry is also wary of spending hundreds of millions of pounds again when the outcome is so uncertain.


“There is a clear attempt (by government) to talk to a narrative which is that companies, if only they prepared properly, would be able to cope and it’s companies fault if they haven’t,” said Justin King, who was CEO of Sainsbury's for 10 years.


“As night follows day, if 50% of lorries are delayed there will be gaps on the shelves inside seven days,” King, currently a director at retailer Marks & Spencer told Reuters.


A senior executive at one of Britain’s big four supermarkets, which includes Tesco, Morrisons and Asda said the government was increasingly treating the industry as an extended arm of the state.


“The fundamental question is, whose job is it to provide food for the UK in the case of a blockade?” he said, speaking on condition of anonymity.


“Taking measures to reasonably protect our business from the impact of Brexit is our duty. When you start to say ‘what is your business doing to feed the nation’ – that starts to move us out of reasonable steps.”


While opposition parties are trying to force another delay, a looming election means nothing can be taken for granted.


That marks a major challenge for a food industry which relies heavily on imports from Europe during the autumn when warmer climes are needed to grow some fruit and vegetables. While Britain normally buys in around half of its food, with about a third coming from the EU, by the end of October the bloc provides some 86% of lettuces, 70% of tomatoes and 27% of soft fruit, according to the British Retail Consortium.


Ahead of the deadline, manufacturers, suppliers and retailers are battling to unravel a system honed over decades that delivers fresh and non-perishable goods to the stores just in time for sale, and in the most economically efficient way.


The need to build up stocks - to mitigate for any delays at ports - is putting pressure on the vast warehouses that form the backbone of Britain’s food network. Jonathan Baker, executive director at Lineage UK, the world’s largest temperature-controlled logistics firm, said his sites are at maximum capacity.


Working in the industry for 37 years, he said the whole system started to creak before the original March deadline, with some food deliveries failing as logistics providers struggled to extract goods on time from warehouses filled to the brim. “It could be a lot worse in October,” he said. “The last Brexit deadline, we were coming out of a relatively quiet period whereas this is slap bang in the busiest time of year.”


With so much uncertainty in the air, supermarkets are asking suppliers to hold more stock, and are likely to source more longer-life vegetables such as carrots and potatoes to avoid any empty shelves, according to the BRC.


“If your competitor is doing better than you then the consumer will walk,” said Andrew Opie, a director at the BRC lobby group. “One of the key items that all consumers look for is tomatoes. If you can’t see it you think the whole store is somehow depleted.”


Source: Reuters




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