David Davis (left) and Michel Barnier after the latest Brexit talks, where there was "no decisive progress" © PA Images
David Davis (left) and Michel Barnier after the latest Brexit talks, where there was "no decisive progress" © PA Images

Brexit 'gaps on shelves' warning from retailers

Will Green is news editor of Supply Management
31 August 2017

Choice and availability of products in the UK is under risk because of Brexit, the British Retail Consortium (BRC) has warned.

In a report the BRC said more than three quarters (79%) of UK food is imported from the EU and the introduction of customs controls post Brexit would affect availability, increase waste and push up prices.

Some 12% of non-food imports come from the EU, while 3%, mainly textiles, come from Turkey. These are governed by the EU-Turkey customs agreement, which will need to be renegotiated to avoid disruption to clothing supply chains, said the BRC.

The BRC said it was encouraged by customs plans released by the UK government, but said “we should not underestimate the complexity and scale of the challenge”, which created the risk of “gaps on shelves” .

Following the latest Brexit negotiations EU negotiator Michel Barnier said there had been “no decisive progress”, while Brexit secretary David Davis urged the EU to be “more imaginative and flexible”.

The BRC is calling for the “agreement and implementation of detailed plans” covering documentation, food safety inspections, security, transit, haulage, VAT and “mutual recognition of enforcement regimes between the EU and the UK on a number of agreements”.

The daily cost of keeping a delayed driver with a refrigerated lorry at a port was £500, said the BRC.

Helen Dickinson, chief executive of the BRC, said: “A strong deal on customs is absolutely essential to deliver a fair Brexit for consumers. While the government has acknowledged the need to avoid a cliff-edge after Brexit day, a customs union in itself won’t solve the problem of delays at ports.

“So to ensure supply chains are not disrupted and goods continue to reach the shelves, agreements on security, transit, haulage, drivers, VAT and other checks will be required to get systems ready for March 2019.”

Duncan Brock, director of customer relationships at CIPS, said: “We’ve already seen an increase in supply costs as a result of the depreciation in sterling, which has in turn driven up prices for consumers. Businesses are largely managing this increase in supply costs by reducing their profit margins and increasing their efforts to secure a larger share in the marketplace.

“However, as clearing customs looks likely to become more difficult and costly for businesses post-Brexit, it could reach a point where companies are unable to take any more of the strain, forcing them to pass any further rise in costs onto consumers. The significant logistics challenges to supply chains caused by customs delays must be mitigated against at the earliest opportunity to reduce the risk of supply shortages.”

David Lowe, partner at law firm Gowling WLG, said: “You only have to see the trucks backing up the motorway from Folkestone when there are delays at the Channel Tunnel to see the impact of any delay in trucks crossing the UK border. Many of those trucks are carrying food and drink products that go on the shelves of our supermarkets.

“And that’s before you get to the deeper barriers to trade once we are outside the EU – in food, detailed regulations are crucial to maintain confidence in food safety.

“Once the UK leaves the EU it is inevitable that the UK and EU regulations will drift apart creating further barriers to trade – a product that complies with UK standards will need to be check to make sure it also complies with EU standards – this will mean at the very least more red tape.”

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