Chain reaction: Bidfood on Brexit
As the UK’s second Brexit departure date edges closer, Bidfood’s Jim Gouldie picks his way through all the possible ramifications
The scare stories and counter claims have been going back and forth since 2016. A volley of speculation from one side, followed swiftly by a rebuttal from the other. To and fro like a rally between two tennis players in full flow.
But as 31 October moves ever closer, it’s still not clear what, how, when or if the United Kingdom will leave the European Union. And despite the best efforts of opposition parties, legal bigwigs and a horde of protesters, the nation is still on tenterhooks about the possibility of a no-deal Brexit – whether at the end of October or in a few months’ time.
What does seem to be a universally held opinion, in the business community at least, is the need to be prepared for all eventualities. With the potential knock-on effect of a disorderly Brexit likely to impact the country’s supply chain in some shape or form, the food and drink industry is desperately forging a plan to cover off the spectrum of scenarios a no deal could trigger.
“We’ve been getting some of our key suppliers in to understand what their planning and assumption is for no deal; whether it’s for two weeks of disruption, three months of disruption or, as one of our customers said, six months of major disruption, then another six before we’re back to normal – so extreme stuff,” explains Bidfood’s Supply Chain and Technical Services Director, Jim Gouldie.
“We believe it won’t be the doomsday you see predicted although, in my view, it’ll be worse than doing nothing [and staying in the EU], unless there’s a deal because we’ll get until the end of 2020 to plan and prepare for that.”
Gouldie is Bidfood’s Brexit aficionado, the man charged with leading the foodservice provider’s strategy to maintain its service against every eventuality. Since the referendum result in 2016, Brexit has been on Gouldie’s mind. From forming a group of senior leaders to discuss priorities and drafting papers on possible actions to creating workstreams for communication, financial exposure, procurement and product availability, Bidfood has been diligently preparing for Brexit.
The business was the most vocal member of the sector as it invested in additional warehouse space to stockpile ahead of the initial deadline in March and has followed a similar plan for October. If, as expected, a new due date is installed for January, it’s safe to assume Bidfood will have contingency in place again.
Despite the painstaking work behind the scenes at Bidfood and the ever-real prospect that no deal is Prime Minister Boris Johnson’s preferred route out of the EU, Gouldie still has no certainty about what that will really mean to the supply chain.
“I haven’t quite clarified from the government yet and they have to be careful in the wording they give around disruption,” he says.
“I met with the government in April, when the biggest concern was exports. It’s the same supply chain: the vehicles come in and deliver to us and they take products out to the EU. So, if those vehicles get stuck getting back over the border, they’re not there for the return trip.
“Previously in March, we thought there’d be three to six months of disruption. It’s just the scale of that disruption – will products be delayed by a day or by two or three weeks? That isn’t totally clear.
“I haven’t got formal advice from the government yet because it’s delicate, but one government department was talking about pretty major disruption of flows coming into the UK and out of Calais to Dover, which would be a huge level of disruption.”
Gouldie also points out that different local councils are working on various assumptions for no-deal activity, only further highlighting the level of uncertainty that’s swilling over the nation – even in the public sector.
While that means wholesalers are making different levels of preparations, there’s one saving grace for those that lost out by preparing for March’s departure date and risk seeing that happen again in October.
“There’s two primary aspects with a no deal: infrastructure and process readiness from an EU and UK side; and a business readiness because there’ll be a change in what people do,” Gouldie continues.
“I’m more confident this time than in March that the infrastructure and process is clearer now than it was. There was a big concern last year about EU infrastructure to support products coming out and in, and quite a lot of that has now been resolved.”
Other UK-side plans have also been revealed to support businesses through any potential disruption, with Operation Kingfisher helping with cashflow problems and calls for a Hardship Fund to protect supply to vulnerable people. Although Gouldie tempers those positive steps with a word of warning.
“There’s a long way to go before I’d have any level of comfort,” he says. “The government is doing more no-deal preparation this time than previously. I just think while we’re getting so close to the deadline and talking about levels of disruption, the plans could be a drop in the ocean. If you’re a hand-to mouth SME and you can’t get goods in or out of the UK, you’re looking at major disruption.
“There are some schemes that give opportunities to do things more quickly. There are authorised consignees so if there’s an issue, products get delivered to your warehouse and authorised economic operators meaning you’re less likely to get stopped for checks. There is also a plan for transitional simplified procedures, although there’s a lack of clarity about what that means. But if you can’t get near the ports, that won’t matter.”
In the meantime, Bidfood is working closely with its suppliers and advising them on how best to prepare for border issues. While that has been well-received, the wholesaler has also taken steps to risk assess its core range products in case there is a supply issue.
With so many potential repercussions, including businesses putting a strain on UK resources to avoid importing products, Bidfood has looked at 2,500 EU-sourced lines to create a core stock that means customers are less likely to miss out on items they need. While customers may not get exactly the same product as they normally receive, they’ll get a like-for-like replacement.
The only possible drawback to this is that there may not be an allergen match on some products, although with close communication and attention with customers, it’s an issue that can be sidestepped.
And while Bidfood has a clear plan for whatever Brexit has to throw at it, Gouldie says the biggest threat to the industry isn’t necessarily no deal itself. It’s having no contingency at all to tackle it if the worst-case scenario happens.
“To give you an idea of my concerns from a wholesaler perspective – not from ourselves or our major competitor – we went to a meeting in preparation for March and some people were asking why we were even leaving the EU, what tariffs were and how they work. It was scarily naïve and leads me to have a real concern over industry preparation,” he adds.
“If I can give anybody advice it’s that even if you make some wrong decisions, you have to try to prepare for something. You need to know what you’re preparing for and don’t go into this blind.”