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McDonald's, KFC and supermarkets warn hard Brexit means higher prices and fewer products

Tom Belger
·Finance and policy reporter

McDonald’s. Photo: Anthony Devlin/PA Archive/PA Images

Leading British supermarkets and popular food outlets have warned of “inevitable pressure” on food prices and fewer products in stores under a no-deal Brexit.

In a sign of rising alarm among top British firms at the ongoing deadlock over the Brexit negotiations, leading companies have come together in a significant and highly unusual intervention in the political debate.

The chief executives of Sainsbury’s, Marks & Spencer, the Co-op, Waitrose, Asda, Costcutter and Lidl signed a letter to MPs warning their customers could be “first to experience the realities of a no-deal Brexit.”

The chief executives of McDonald’s, Pret A Manger and KFC in the UK also backed the call for politicians to find an urgent solution, saying it was impossible to stockpile enough goods.

READ MORE: Britain’s biggest supermarket reveals its fears over a no-deal Brexit

Their letter, seen by Yahoo Finance UK, suggests both product availability in stores and best-before dates could significantly reduce because increased delays from new border checks would see fresh food going off much sooner after reaching them.

The message may prove uncomfortable reading for ministers as the business figures suggest no-deal preparations are inadequate, echoing a recent warning by the Bank of England governor that there are “not enough ferries” or warehouses.

The joint statement by some of the biggest and most popular brands in the UK was co-ordinated by the British Retail Consortium. The body represents more than 5,000 businesses in the UK’s retail sector, and its chief executive and chair both also signed the open letter to parliament.

The letter reads: “While we have been working closely with our suppliers on contingency plans it is not possible to mitigate all the risks to our supply chains and we fear significant disruption in the short term as a result if there is no Brexit deal.

READ MORE: Why taking ‘no deal’ off the table is vital for UK firms

“Nearly one-third of the food we eat in the UK comes from the EU. In March the situation is more acute as UK produce is out of season: 90% of our lettuces, 80% of our tomatoes and 70% of our soft fruit is sourced from the EU at that time of year.

“This complex, ‘just in time’ supply chain will be significantly disrupted in the event of no deal. Even if the UK government does not undertake checks on products at the border, there will still be major disruption at Calais as the French government has said it will enforce sanitary and customs checks on exports from the EU, which will lead to long delays.

Supermarkets warn of fewer products. Photo: Chris Radburn/PA Archive/PA Images
Supermarkets warn of fewer products. Photo: Chris Radburn/PA Archive/PA Images

“For consumers, this will reduce the availability and shelf life of many products in our stores.”

The top business figures say they are “extremely concerned” that leaving without a deal with the EU could result in higher tariffs, increasing import costs and putting upward pressure on food prices.

They suggest one alternative – Britain setting import tariffs at zero, while UK farmers still face tariffs exporting to Europe – could have a “devastating impact” on farmers who also supply them.

READ MORE: What is a no-deal Brexit and what could it mean for firms and consumers?

The letter says stockpiling is being carried out as far as possible, but highlights the “very little” warehousing space now available in Britain and the “impossible” nature of stockpiling fresh goods like salad leaves and fruit.

It ends: “We are therefore asking you to work with your colleagues in parliament urgently to find a solution that avoids the shock of a no deal Brexit on 29 March and removes these risks for UK consumers.”