With less than six months to go until we are due to leave the EU, we still don’t know what deal we have in place or if, indeed, we have no deal, which means there is a lot of uncertainty.
It means food and beverage businesses cannot plan and commit to a strategy because so much of what we all do involves imports and exports. But with unknown tariffs, how can anyone budget or plan realistically?
The Government seems to have no ‘Plan B’; as the recent Conservative Party Conference confirmed, it seems to be either the Chequers deal or no deal, but the fact that we’re no clearer on what outcome is most likely is causing tremendous concern.
We are not sure people fully understand the impact of no deal, but it could be catastrophic. As a nation, we would automatically default to World Trade Organisation rules.
We are, of course, already members of the WTO, but when trading within the EU the WTO treat this as one economic block, with movement between borders being free. Until new deals are negotiated, we could be eligible to pay WTO tariffs every time a border is crossed.
Research from KPMG UK suggests that some food items could incur price increases of more than 12 percent if the UK began trading under WTO customs rules, which is more than four times the rate of inflation.
We are in a situation where career politicians are trying to negotiate a businessman’s deal, which – with the best will in the world – they are simply not equipped to do.
The level of uncertainty is worrying. We are speaking to manufacturers and brand owners and they are not guaranteeing any prices beyond the end of March, adding to the uncertainty.
Insult is added to injury for consumers because of a shortage of some produce thanks to a combination of the harsh winter and prolonged summer, which saw farmers being forced to feed their livestock winter food earlier because the usual grazing grass failed to grow due to lack of rain.
Yields of potatoes are up to 40 percent lower than expected, which means the price will remain high, and we have similar problems with lots of the winter veg which is exceptionally high on price.
The Government must accept the blame for the increasing pressure on the food industry – and the potential knock-on effect this will have on consumers.
Had the Government managed the Brexit process correctly, and engaged the right people to guide them through what is undoubtedly a very complex process, perhaps they would have had more time to deal with issues that will shape the future of our industry moving forward.
We’re just hoping that, at some point in the very near future, we get details of some kind of deal for the UK, so that we can all start to plan ahead with a little more certainty.