Gridlock, shortages and price rises: the BRC's Brexit warning

The cost of a single refrigerated lorry gathering dust at Dover is a €500 a day. Following Brexit, four million trucks could be racking up these costs in a billion pound customs bottleneck - but the cost to the UK consumer could be even worse.

Shoppers could face food shortages that will make the winter shortfall of iceberg lettuces and courgettes seem small by comparison, warns a new BRC report released today, A Customs Roadmap.

So what has prompted these concerns and can anything stop these fears becoming a reality?

Dover disaster zone

The forecasts of doom stem from fears over new customs arrangements. With nearly 80% of food imports coming from the EU, the BRC warns the key port of Dover is a disaster zone waiting to happen.

It claims the nightmarish scenes of Operation Stack could become a brutal daily reality. “Our docks, particularly Dover, which is central to our whole argument, are not set up for any kind of delay,” says Andrew Opie, director of food and sustainability at the BRC. “Dover is simply not designed for a complex customs approach. It is designed for trucks to roll on and roll off and then keep moving as if it’s a motorway.”

Senior industry figures fear the reality could mean motorways like the M20 and M2 will turn into giant car parks, at a massive cost to food and drink importers.

“This is a huge issue not just for retailers but also for all those suppliers who are importing ingredients from the EU,” says FDF director general Ian Wright. “We’ve heard the management at Dover say on several occasions now that unless they know pretty bloody quickly what the government is going to do, they are not going to be ready come March 2019.

“Unless Dover is sorted out this could manifest itself as Operation Stack all around the M25. We cannot afford any sort of delay at the port or it will have a huge impact on the supply chain.”

Fresh food in the firing line

The impact on shoppers is potentially huge. The BRC document warns of shortages across the board, considering a massive 79% of food imported from retailers comes from Europe, including 43% of beverages, 21% of fruit & veg and 14% of meat and fish. 

However, it is the supply chain for perishable, short shelf life food that is singled out as being at highest risk of disruption. The BRC says products most vulnerable to availability problems post-Brexit include oranges imported from Spain, French wine and apples, Cheddar cheese and beef from Ireland, tomatoes from Holland and mozzarella from Italy.

Supermarket bosses fear literally thousands of different SKUs could be affected, with EU imports accounting for 20% of cheese in UK stores, 20% of beef, and levels of 55% for products such as tomatoes and broccoli.

“There is a genuine fear that we are not going to be able to get things on the shelves,” says Opie. “There are periods when we are heavily reliant on supplies from the EU. Broccoli is a good example. At times of the year we have almost 100% produced here; at others times of the year we import it almost solely from places like Spain and Portugal because customers wants broccoli 24/7 right through the year.

“We saw this with the situation with the lettuces from Spain in the winter. Think not of a weather disruption but of a port disruption and you see exactly the same results but worse. This has the potential to be magnified enormously unless we tackle the issues posed by our customs system.

“We are talking about standard products that you would expect to see in any supermarket. We are talking about stuff that you will absolutely notice if you go into a supermarket and they are not there.

The FDF’s Wright shares Opie’s concerns. Although he sees some opportunity to grow more products domestically, Wright says there are many food products “you simply can’t” produce in Britain.  As winter hits, we will become even more reliant on Europe.

“I don’t see too many olive growers in the UK and there are precious few avocados. Look at ingredients such as sunflower oil. That sort of thing is either going to be more expensive or less available.”

Combined with the post-Brexit hit to food prices, Wright claims shoppers are massively unprepared for the shock that could hit stores.

“I don’t think people are going to accept there are complicated supply chain issues behind the reason they can’t get their sunflower oil, their feta cheese or their avocados. They did not expect food shortages to be a consequence of Brexit. They are not ready for it and frankly the UK food and drink industry is not ready for it either.”

Potential solutions

Industry sources say there needs to be clarity - and fast - on how the food and drink industry will be regulated. 

Today’s BRC report describes an agreement on some sort of mutual recognition of product standards and regulation on food imported between the UK and the EU as “crucial”, as will be moves to allow a fast-track customs operation.

The government will also need to secure agreements on health and veterinary checks, security, VAT, haulage, transit and controls over driver immigration.

Earlier this month the government said it was looking at two options. One is to bring in a “highly streamlined customs arrangement between the UK and the EU”, streamlining and simplifying border requirements to remove barriers to trade, with an onus on new technology being used at customs control points.

A second, more ambitious plan is for an “unprecedented”, and “untested” approach, which would do away with the need for a UK-EU customs border, and see the UK mirroring the EU’s requirements for imports from the rest of the world.

Specific talks on how such mutual recognition could work has concentrated so far on the Irish border, largely ignoring the perhaps even more key pinch point of Dover.

The Grocer understands the government has been discussing plans for a system of checks at authorised company premises policed by the FSA, which would take the strain away from Dover. (Although the body this week remained tight-lipped about its potential involvement and said it had “no plans” to conduct import checks.)

Even if that was the case, there is a large question mark over whether the FSA has the manpower and resources to react in time. It, along with local authorities, has found itself blitzed in recent years by government cutbacks on manpower, leaving doubts over its ability to take on a raft of new responsibilities.

With the clock ticking, March 2019 does not seem that far away for anyone in the food and drink supply chain. As for consumers, the reality of what Brexit could mean for their everyday supermarket shop has not yet even begun to sink in.