The UK food industry is “flying blind” because of uncertainty around trading in the post-Brexit period, The Food & Drink Federation’s (FDF) chief executive Ian Wright said today (10 December).
One UK food manufacturer has also predicted “total carnage” in January if no UK/EU trade deal is in place.
Go deeper with GlobalData
Speaking at UK food industry body FDF’s Brexit Essentials – The End of Transition event today (10 December), Wright said the uncertainty about whether the UK can forge a trade deal with the EU before the end of the post-Brexit trading period on 31 December is a cause for concern.
“We are at the stage now where we don’t know what’s going to happen,” he said.
Wright said it is “unclear whether we will face tariffs as part of a no deal or get a deal at the last minute”.
He added: “If we get a deal there won’t be time to examine the text before it comes into effect. We will be flying blind.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataTalks are still on-going to try and secure a trade deal between the UK and the EU to kick in after 1 January when the UK goes it alone.
UK Prime Minister Boris Johnson met with European Commission President Ursula von der Leyen in Brussels last night to try and iron out existing differences but no agreement has yet been reached and the parties say Sunday (13 December) is now the deadline for any deal to be signed off.
However, Wright said it is “significantly more likely” that the UK will be exiting without a deal.
“We need to make preparations on the basis of that,” he said.
His colleague Dominic Goudie, the FDF’s head of international trade, added: “I would hope that by now there would be some clarity about what businesses will be facing from the 1st of January but sadly that’s not the case.”
UK food companies taking part in the event are preparing themselves for a difficult period and likely price rises in the case of a no-deal outcome.
Adam Jones, managing director of chilled gravy and sauces manufacturer Solina Foods, said: “There will be hidden costs which we don’t understand yet because we are not in it. Small differences on the ground will make a huge difference when you pile them up.
“It will be in the granular detail where the trip wires rest. There are likely to be increases in cost in the supply chain which could be quite significant but we are not yet in a meaningful position to have discussions about that. Tesco talked about 5% food inflation and those claims are real.”
Jonathan Lill, CEO of ambient cake maker Bright Blue Foods, who revealed his business is building stocks up to manage potential delays of supplies at ports after the end of December, said: “There is a huge amount of work to get through but there is a huge amount of fog at the moment.
“There will be last-minute discussions, which will not be easy. Costs that someone will have to pick up will drive inflation to quite a significant level.”
Lill and Jones believe the UK food industry would bounce back from no-deal linked problems after a difficult initial period.
Lill said: “I can see a couple of months of disruption which would ease every week.”
Jones added: “The food industry is very resilient. It will be total carnage in January but the orders will flow.
“It will take the industry a long time to get used to it but it will find a way – it always does.”
