David Cameron’s family kitchen in north London is stocked with ingredients imported from the US and European Union. So the prime minister’s worry about supply-chain disruptions as Britain quits the EU should be particularly acute, if nothing else.
With little more than two years to go until Brexit, the EU remains the largest market for UK-produced goods — with 65 per cent of EU-related imports coming through the Single Market. Much of the country’s supply chain operates only on the EU’s terms.
Martin Preti, the chief executive of ABPI, the supply chain body, reckons 25 per cent of UK food exports could be affected by immigration issues after Brexit, so food firms now expect “very heavy change” from Britain’s departure.
And MPs in parliament’s Treasury Select Committee will soon spend a day hearing from businesses that rely on imports from the EU. Over an earlier session, Lesley Fellows, chief executive of Welcome Break, which runs the world’s largest caravan parks, said deliveries of attractions, from the Kentucky Derby in the US to the World’s End in Cornwall, would be delayed or delayed entirely, should goods need customs clearance because of Brexit.
“If everything stays the same, many of our customers will run out of supply,” she said.
A report published last November by the government’s strategic foresight unit said three key concerns over Brexit were:
Restrictions on staff travel and therefore supply chains, as well as UK farmers and food producers.
Security of trade, given continued reliance on EU military forces.
Continued EU surveillance of UK trade and movement of persons.
The former UK chief executive of the US embassy in London, Patrick Ventham, in an October paper, sketched out the country’s supply chain issues.
“Although household names like Tesco, Waitrose and Asda operate well managed supply chains, large parts of the food chain, such as food processing and transport, have been inconsistent, if not non-existent in relation to efficiency in recent years,” he wrote. “Efficiency will inevitably suffer as a result of Brexit, particularly where it is not in the interests of the major players to maximise efficiencies.”
Anxiety about disrupted supply chains pre-dates the election result and there are more than 600 responses to a Treasury department online survey.
Seven respondents to the survey do not expect to produce anything from the EU after Brexit, while 23 percent expect to export foodstuffs. The overall figure of 457 reflects the poor reaction to the survey, though the figure among those who trade in food and drink is significantly higher.
Two-thirds of respondents said they were concerned by border challenges, but only a small fraction predicted major disruption of production from elsewhere.
One business, Somerfield, said its importers from the UK have already claimed preference over imports from other nations. “It appears that importers from other EU countries are prioritising our internal supply chain rather than more remote suppliers in preparation for changes to the EU market,” the listed supermarket supplier said.
“There is clearly a great deal of uncertainty and a lot of misinformation out there about how to work around the complexity,” said Chris Sillitoe, commercial director of Marks & Spencer, Britain’s largest retailer.
A report last November from the Centre for Retail Research and the National Retail Federation warned of a big hit for businesses if barriers from the EU were introduced.
Stephanie Diego, director of food policy at the National Trust, the conservation charity, said England is the EU’s single biggest market. “There is huge uncertainty about how this is going to play out,” she said.