Yahoo Finance UK food supplies may arrive 'late, tatty or not at all' next month from Brexit disruption
Food and drink firms fear “confusion and chaos” as Brexit forces radical changes on how Britain imports and exports food next month.
Business chiefs warn firms not only face uncertainty over how new border checks will hit food and drink supply chains, but also have “no clue” whether they face tariffs as well.
“Goods will arrive late, they will arrive potentially tatty...and there may be interruptions randomly in supply,” warned Ian Wright, chief executive of the Food and Drink Federation (FDF), on Tuesday.
He warned even firms who had prepared would be “penalised” through delays, if other firms and lorry drivers ahead of them arrived at borders without the right paperwork.
Wright told a parliamentary evidence session on Brexit preparedness on Tuesday such delays would “erode the confidence of the shopper in the supply chain.”
Northern Irish shoppers could face particular disruption, with the business chief dubbing border arrangements a “complete shambles.”
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The UK government’s Brexit plans mean importers and exporters face more paperwork and checks even if a last-minute trade agreement is struck with the EU by the end of the year.
In the event no deal is struck, Britain would lose its current right to tariff- and quota-free trade from 1 January. Exporters in certain sectors would face new taxes on their sales to EU countries, while Britain could place similar tariffs on certain imports.
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“With just 14 working days to go, we have no clue what’s going to happen in terms of whether we do or don’t face tariffs,” Wright said.
“That isn’t just a big imposition, it’s a binary choice as to whether you do business in most cases. The question is—can I afford to pay for this product with the tariff, and will I get my price from the shopper?”
Wright highlighted Britain’s dependence on the EU market for food supplies. He told MPs on the business, energy and industrial strategy (BEIS) committee than more than 60% of food is imported at this time of year, with the majority from the EU and around three-quarters of it perishable.
He said the “level of confusion and chaos” with such little notice was an even bigger concern than the financial impact. “We can’t be absolutely certain about the movement of food from the EU to the UK from 1 January.”
Even though firms have been planning for new checks, Wright said proper planning would require more detail on new regulations and how trade flows would work.
READ MORE: UK tomato, lettuce and lemon prices to jump on no-deal Brexit
But firms could not know exactly what checks would be imposed, how quickly and effectively they will happen, and how prepared others will be, he added.
“The key fact is not ‘am I prepared,’ but ‘is the person driving the lorry in front of me prepared?’ If I’m behind that person in the queue I have no control. I have no idea when I’ll arrive.”
He predicted that the disruption would be handled “reasonably well” at and around the border in Kent, but said he was less confident about Stanraer, Holyhead and other ports serving Northern Ireland.
“In Northern Ireland it’s even worse. The Northern Ireland protocol is a complete shambles. The idea you can prepare for something a big as the change that’s going to to happen—that’s to say, everybody doing business in Northern Ireland is in effect exporting to the EU, many of them for the first time—is ridiculous.”
43% of FDF members have said they won’t supply Northern Ireland at all for the first three months of 2021, according to Wright. “Our members are saying it’s too risky,” he said, noting it would “restrict choice” for shoppers.
Darren Jones, Labour chair of the BEIS committee, said Wright and other representatives of the automotive, plastic, financial and professional services sectors had all highlighted the need for more clarity on the looming changes and time for firms to adjust.
“This morning we heard evidence which pointed, even in the event of a Brexit deal, to potential food shortages and price rises, and the threat of heaping significant costs onto our car industry, and also of concerns around financial services and the wider future relationship,” he said in a statement after the hearing.
A department for international trade spokesperson said the UK’s new tariff rules for countries it lacks a trade deal with would “slash red tape, making it easier and cheaper for businesses to bring in goods from overseas from 1 January.”
“No tariffs have been increased under the UK Global Tariff (UKGT), instead thousands of items people across the country buy every day will become cheaper to import. The UKGT almost doubles the number of products that can come into the country tariff-free, compared to existing arrangements on EU terms.”
EU products will face tariffs for the first time in decades, but the spokesperson said more than 50% of global goods imports will face tariffs under the new arrangements.
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