FWD column February 2019: James Bielby
James Bielby: “FWD wholesalers have done a fantastic job of preparing for every possible outcome”
As I write this, we’re less than 70 days from the date on which the UK is due to leave the EU.
By the time you read it, another 14 days will have ticked off the countdown clock and the chances are we’ll be no nearer to knowing which of the possible scenarios the wholesale channel will be facing after 29 March.
If a deal has been agreed, nothing changes immediately – except that the major investment made by our wholesale members over the past few months in preparing for a no-deal exit will be forfeited.
Given the lack of clear direction from the government, our members have had to take resilience planning into their own hands, renting extra warehouse space to accommodate the additional stock needed to help their customers through the difficult early months of a disorderly Brexit. They’ve had to assume, again in the absence of reliable guidance, that there will be disruption and delays at ports, with implications for the 30% of our food that comes from the EU.
If that’s the case, it’s fresh produce that will be most affected, and distributors have also had to take into account that extended checks on trucks leaving the UK will mean they’re not available to bring goods back in as scheduled.
One area where we do have reliable intelligence is in pricing. It’s widely agreed that resorting to WTO tariffs would increase food prices by between 14 and 20%, which would add up to £8bn to the cost of sourcing goods from the EU. It’s not practical to expect the supply chain of supplier, wholesaler and retailer or caterer to absorb all of this kind of increase, and economists suggest that food prices to the consumer – and therefore inflation – would spike dramatically.
FWD has been front and centre of Brexit no-deal planning with government and other trade associations in the food and drink industry, and the whole sector has done all it can to ensure it’ll continue to deliver a good service to retailers and caterers whatever trading scenario it faces in April. There will no doubt be talk of food shortages in the event of no deal and indeed we should be prepared for a degree of seasonality in some products. This might mean changes to menus, but it won’t mean empty shelves or empty plates.
FWD wholesalers have done a fantastic job of preparing for every possible outcome, despite the lack of clear direction and eleventh-hour brinksmanship of the decision makers.
Brexit has been a challenge, but not so much that it has distracted the wholesale sector from its core business of helping its customer base thrive in an already dynamic market. So wherever we are on 29 March, the suppliers’ products will be delivered and the customer businesses’ needs will be served. Of that, at least, we can be certain.