At a time when food banks are already giving out more packages than ever, would a no-deal Brexit drive prices higher and reduce or eliminate the availability of any particular foods?
The Trussell Trust operates the UK’s biggest network of food banks. The annual figures are broadly seen as an index of social hardship, and the results aren’t good. The latest figures show a 13% increase in food bank use on the previous year. This equated to more than 1.3 million emergency food packages being distributed. A food bank referral can be down to a number of factors, such as benefits not covering the cost of essentials or the loss of a job. Nearly half a million of these emergency food packages went to children.
Although food has already seen some price increases due to a weaker pound and increased inflation, further pressure on the purse strings of the British public could be disastrous and push these figures into multiple millions. According to Sustain, the alliance for better food and farming, there are currently 8.4 million people in the UK who are living in a state of food insecurity. These people would have no resilience to further price increases or scarcity.
In total, over 40% of our food either comes directly from the EU or through trade agreements we can utilise because we are part of the EU. A no-deal Brexit could potentially mean we lose access to this percentage of our food supply in the short-term. We do not have the infrastructure or capability within the country to counteract this shortfall, which will inevitably lead to shortages of goods. As scarcity increases the prices of available food will be driven higher. Over 70% of the cropland required to grow our food is located abroad.
An alternative to a free trade deal with the EU is to enter into an agreement with the US or Australia. However, according to Which?, 80% of the British people aren’t happy about importing beef from countries that use growth hormones on the livestock, a practice currently banned in the EU, and 73% do not want to import chlorinated chicken from the US.
The National Farmers Union (NFU) say that if a no-deal Brexit stops our food imports, Britain will run out of food by August 2019.
There were media reports the government were preparing secret plans to stockpile food and medicine in case of a no-deal Brexit. The Brexit secretary, Dominic Raab, described the coverage as a selective snippet of the plans but refused to deny it.
It’s true that a no-deal Brexit might never happen, and constantly looking at the worst-case scenario isn’t very inspiring. However, it would be unwise to move forward wearing blinkers to the possible changes the industry faces when in reality food manufacturers are already feeling the impact of Brexit.
Many companies, especially larger producers, are often working to a five or ten-year plan. This is hard to do when we’re not even sure what is going to happen in 2019. This has led many companies to hold off on any further investment, as they are uncertain of the future. In real terms, this is akin to moving backwards. Combine this with the weakening of the pound and it makes the UK a less appealing option for migrant workers. 40% of migrant labour from the EU is involved in food manufacture, and companies are already reporting significant increases in the number of vacancies they need to fill.
Even if a no-deal Brexit doesn’t happen, it will be too late for some companies. We are seeing an increasing number of companies move some of the production to other countries within the EU. For example, Tilda is moving 30% of the rice it processes to other EU countries. Tilda’s head of external affairs, Jon Calland, says when the UK has third-country status there will likely be tariffs and complex ‘rules of origin’.
A continual stream of political resignations and misinformation seems unlikely to stop anytime soon. It looks like we’re going to have to wait and see what happens at the time. Even in the unlikely event that the government is now able to deliver a deal that sees our supply chain with the EU remain exactly as it is, Brexit will still have had an impact. Hopefully, the limited effect we’ve experienced so far is the worst of it.
Prior to The Sterling Choice I spent my earlier life in the Insurance industry (don’t judge me). I started The Sterling Choice with Gareth back in August 2013. When I look back to our h...