Whilst we’ve all rightly been focused on COVID and getting our industry back on its feet, it’s important to update Auditel Clients on another challenge that will face us all at the end of the year. Specifically, the end of the Brexit transition period on 31st December.
Up until now, there has been no change to our trading arrangements with the EU. On the 1st of January this will change.
While the UK government continues to negotiate with the EU, there are two potential outcomes and while the difference between ‘deal’ and ‘no deal’ may be less dramatic due to the government’s recent planning, all foodservice operators would be well advised to plan for some disruption in January and beyond.
Most major food suppliers have had been working on Brexit implications for over two years and are closely connected to government, representing and lobbying on behalf of the industry and their customers, and supplier base to ensure their plans are robust.
Whilst suppliers are generally well prepared for different eventualities, particularly if a deal with the EU is not concluded.
- If a deal is reached, then the impact on food tariffs should be low level or even zero, depending on the final shape of the deal. Bear in mind that the negotiators are working towards a less closely integrated deal than last time – so even with a deal, selected tariffs remain a possibility. We should expect some border disruption, as new systems/procedures will still need to be deployed to reflect the movement of stock out of / back into the EU Customs Union and Single Market, but a deal covering food standards might make such processes lighter touch and therefore easier to manage.
- If no deal is reached, which we believe to be the more likely outcome, we expect to see import tariffs applied on some food items, and increased paperwork procedures at UK ports. As a nation we import roughly 40% of our food, and additional border checks are likely to create delays, disruption and in turn, product availability issues.
The Political path ahead remains unclear and time is now tight, so well-prepared businesses should have full mitigation planning to ensure they have the best availability. In particular:
- They have storage capacity and are building significant buffer stocks within their own network
- They are working closely with UK-based suppliers to ensure they are stocking up on raw materials, packaging and finished goods
- They can cover any fresh product shortages with frozen equivalents and will support British farming and local sourcing wherever they can
- They have the know how to manage the new import regulations and they can limit any border delays through their logistics planning