MPs’ rejection of May’s EU deal leaves the food industry facing disaster with time running out. By Nick Hughes.
In the lead-up to Tuesday’s momentous vote businesses were united by one wish: to have certainty about the Brexit endgame. After the crushing rejection by MPs of Theresa May’s deal, the only certainty now is that the fog that shrouds the details of the UK’s future relationship with the EU is denser and seemingly more impenetrable than ever.
The state of paralysis that has engulfed parliament is catastrophic to a food industry that functions most effectively when there is predictability. Faced with further weeks of uncertainty and with days fast running out until the official divorce date, industry bodies don’t exaggerate when they say we are hurtling towards a disaster for the British food economy.
Caterers that rely on ingredients produced in the EU have no certainty they will be able to source products at commercially viable prices after March 30th.
Dairy processors operating on both sides of the Irish Sea have no certainty that goods will continue to flow freely across borders.
Strawberry growers planning for this summer’s harvest have no certainty that they will have labourers to pick the fruit.
Sheep farmers who sell into EU markets have no certainty they will find buyers for products that face near 60% tariffs if no deal is struck.
Even parts of the industry that have continued to perform strongly since the EU referendum are beginning to exhibit nervousness at the deadlock. The UK coffee-shop market grew by 7.9% in turnover during 2018 to break through the £10 billion mark, yet the political impasse over the last 18 months has contributed to growing anxiety about labour shortages, rising prices, investment and eroded consumer confidence, according to the research consultancy Allegra Strategies.
From the industry, frustration and anger is being replaced with anxiety and, in some quarters, blind panic with reports emerging that warehouse capacity is fast approaching its maximum as businesses rush to stockpile ingredients.
The Food and Drink Federation (FDF) has pulled no punches in its criticism of the Brexit process to date, yet on Tuesday night the trade body put out a statement from its chief executive, Ian Wright, that struck an exasperated tone as he pleaded with politicians to find a way to indicate what alternative to May’s deal should be pursued. (The FDF directed its anger instead at a government consultation on plans to restrict food and drink promotions which it described as “grossly insensitive and a monumental distraction when so many food businesses are facing into the abyss of a no-deal Brexit”.)
Industry representatives are now coalescing around a call for the article 50 process to be extended to stave off the threat of what UKHospitality and the National Farmers Union both describe as a “disastrous” no deal Brexit scenario. The UKHospitality chief executive, Kate Nicholls, called for ideological differences to be put aside to ensure that consumers are not in the direct firing line of the “supply chain chaos that would inevitably ensue” from crashing out of the single market without a deal.
Yet as another week in Westminster draws to a close there is scant evidence that a conclusion to the chaos is just around the corner.
May has consistently said that no deal at all is better than a bad deal. For the food industry, any kind of certainty is better than no certainty at all.