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No Deal Brexit Scenario ‘Threatens Thousands of UK Food Producers and Retailers’

Written by: Keith Tully

Reviewed: Thursday 5th July, 2018

Brexit written on one egg

Thousands of UK farmers, food producers and retailers would face “damaging consequences” if the UK were to leave the European Union without an agreement on future customs and trading arrangements.

That’s according to the British Retail Consortium (BRC), which has warned that a ‘no deal’ Brexit scenario could lead to widespread supply chain problems within the grocery sector and food supplies being left to rot at ports in various parts of the country.

“We must avoid a cliff edge scenario on the 29 March 2019 at all costs,” said Richard Pennycock, BRC chairman, in a statement intended to encourage the British government to establish a workable post-Brexit agreement with EU negotiators.

“Frictionless trade is essential if the industry is to continue to provide the level of choice and value in shops that UK consumers are used to seeing,” he said.

The BRC describes the food industry’s supply chain as being “complex” and “highly organised” but also “fragile”, with concerns apparently growing that a failure to reach a deal on Brexit would be bad news for businesses both in the EU and the UK.

The BRC has pointed out that roughly 50 per cent of Britain’s food comes from overseas and about 60 per cent of those supplies come from EU member countries.

“We need the EU to be flexible and creative in negotiation and recognise what is at stake for exports to the UK. Time is running out,” Mr Pennycook said.

A particular worry for the BRC is that thousands of small businesses within the UK’s food sector supply chain will find themselves facing a battle for survival in the event of what’s being called a “cliff edge Brexit”.

It is feared that as many as 12,500 small retail businesses will be at high risk of becoming insolvent and heading out of business altogether if no Brexit deal is agreed in the coming weeks.

BRC analysts estimate that 29 per cent will be added to the costs involved in importing food and beverage products from EU countries if there is no Brexit deal done between now and March 2019.

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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