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Co-op boss warns of no-deal Brexit fresh food shortages and price hikes Fruit, vegetables and wine will be scarce and costly under no-deal Brexit, warn retailers
(about 5 hours later)
The chief executive of the Co-op has warned that a no-deal Brexit could lead to fresh food shortages and higher prices in its supermarkets. Fresh fruit and vegetables and wine are among the products likely to become scarcer and more expensive after a no-deal Brexit, according to a flurry of warnings issued by retailers and the alcoholic drinks industry.
Steve Murrells said he was most worried about fruit, where he expected prices to surge as retailers may be forced to fly in supplies if the chaos predicted in leaked government documents became a reality. The department store chain John Lewis and the Co-op supermarket said customers’ weekly shop could be disrupted, amid concerns that retailers will have to fly in supplies if the chaos predicted in leaked government documents becomes a reality.
“We think there will be shortages in some fresh food areas. Where that is the case, we would endeavour to bring it in to give our customers a choice.” It came as the Wine and Spirit Trade Association (WSTA) criticised the government for “reneging” on plans for a nine-month suspension of paperwork on imports on wine, the UK’s most popular alcoholic drink, if no deal is reached with Brussels.
Murrells said the convenience chain was using extra warehouse space to stockpile long-life products such as water, toilet paper and canned goods – but the pinch point was fresh food, particularly soft fruits such as blueberries, and also apples and pears, which are imported during the British winter. Defra refuses to give details on no-deal Brexit food supply disruptions
The former Tesco executive said it was easier to “knit fog” than make accurate predictions about the fallout from a disorderly Brexit. “The question for us is how much of the price increases can we absorb?” Murrells said. “How much can we spread that impact over a period of time?” In an open letter to the Brexit ministers Michael Gove and Stephen Barclay, the WSTA said the added administrative burden on imports would force up the price of a bottle of wine by 10p, reduce choice and cost the thriving UK wine industry £70m.
To avoid empty shelves the Co-op would resort to using air freight to bring in fruit. The retailer sells only British meat so its supply lines would not affected by the UK crashing out of the trading bloc. Importers who rely on the flow of niche wines from the EU could be devastated, the trade body warned, while the UK could lose its position as the global wine hub “overnight”.
There were “very early signs” that Britons were stockpiling, Murrells said, but he suggested shoppers would go to big supermarkets to do this rather than its small convenience outlets. John Lewis also gave a grim Brexit forecast as it reported its first-ever half-year loss – of £26m.
The behaviour would probably intensify the closer the country got to a no deal, he said. Leaving the EU with a deal was the best scenario, Murrells added “because it was the only way to avoid the inevitable impact on our customers”. Its chairman, Sir Charlie Mayfield, a former government adviser, said the effect of leaving without a deal would be “significant and it will not be possible to mitigate that impact”. He said Waitrose, part of the John Lewis group, has been stockpiling some products, including wine, olive oil and canned goods, but could not stave off disruption to the import of fresh food across the Channel.
Co-operative Group Mayfield believes people could be put off buying non-essential items from John Lewis in the run-up to Christmas if consumers anxious about economic turmoil curb their spending.
The Co-op chief executive, Steve Murrells, is particularly worried about fruit because he expects prices to increase.
Murrells said the convenience chain was attempting to mitigate the potential impact by stockpiling long-life products such as water, toilet paper and canned goods but was struggling to manage logistics for fruit such as blueberries, apples and pears, which are imported during the British winter.
“We think there will be shortages in some fresh food areas,” he said. “Where that is the case, we would endeavour to bring it in to give our customers a choice.”
To avoid empty shelves the Co-op would resort to using air freight to bring in fruit. The retailer sells British meat only, so those supply lines would not be affected by the UK crashing out of the trading bloc.
There were “very early signs” that Britons were stockpiling, Murrells said, predicting hoarding could intensify the closer the country gets to no deal.
He said securing a deal was “the only way to avoid the inevitable impact on our customers”.
The chief executive of Morrisons, David Potts, said the supermarket chain’s contingency plans included switching to alternative ferry crossings such as Le Havre to Portsmouth if the Dover-Calais route became gridlocked as well as measured stockpiling in the run-up to the deadline.
The retailer has also secured Authorised Economic Operator certification, which Potts likened to “speedy boarding” as members of the scheme were less likely to be stopped at customs.
In an apparent reference to a quote by the boxer Mike Tyson, he said the supermarket chain had plans but that “everyone has got a plan until you get punched in the face”.
Flagging its concerns for wine retailers, the WSTA said its members could end up “drowning” in red tape, including 600,000 extra customs forms, after it was told by government officials that they will not abide by an earlier promise to waive paperwork on wine imports.
The WSTA said this would cost the industry £70m and threaten the UK’s position as the global hub of wine, as well as adding 10p to the price of a bottle, forcing the cost of the prime minister Boris Johnson’s favourite Tuscan Tignanello up to £180.10.
“We can only conclude from this that government doesn’t understand the value of the UK wine industry nor the value of imports in general to the UK economy,” said the WSTA chief executive, Miles Beale.
“The burden of import certificates for wine will not simply fall on EU businesses – their pain will be shared by UK importers and ultimately UK consumers.”
The WSTA’s concerns revolve around the extra administrative burden that would be required in order to keep wine flowing into the UK from the EU in the event of a no-deal Brexit.
Imports would require certificates known as VI 1 forms, as well as expensive lab analysis, meaning higher costs and delays for the 55% of Britain’s wine imports that come from the EU.
Food & drink industry
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