In a series of policy demands and priorities, published this week, FDE also called on Brexit negotiators to put in place an “adequately long transition period”, given that the development of a “fruitful and positive relationship” between the EU and the UK “may take longer than expected”.
In recent weeks, amidst political turmoil in the UK, the likelihood of a deal being agreed by March 29 has diminished. Retailers have begun warning – though not always publicly – that this means there are very likely to be empty shelves relatively quickly after that date.
Earlier this week, the UK government was forced to publish a report on the implications that a no-deal scenario would have on business and trade. The 15-page document warned of potential food shortages, especially fresh fruit and vegetables, as well as food price increases – which will be exacerbated if consumers start stockpiling towards the end of this month.
The paper also noted that “many businesses” in the food supply industry are “unprepared for a no-deal scenario”. However, “transitional simplified procedures for EU trade at roll-on roll-off ports … will make it easier for traders importing from the EU to comply with customs requirements immediately after EU Exit”.
Speaking at an event in London in January, Ian Wright, director general at the UK Food and Drink Federation suggested there was little understanding of what the actual level of disruption at ports will be.
Wright said: “Until three or four weeks before Christmas businesses ducked the stockpiling issues. Then some said they were [stockpiling] and now even the companies who are not stockpiling say they are because that is what the analysts said they should be doing.”
Unilever, Mondelez and Nestlé are among the companies that have admitted they are stockpiling some goods in order to prepare for the worst.
In February, representatives from across the agri-food chain met with the EU’s chief negotiator Michel Barnier to press for “special consideration” for the industry in the event of a no-deal Brexit. FDE board member and Nestlé CEO of zone EMEA Marco Settembri called for a “series of measures that priorities food products because it’s a primary need for consumers”.
FDE, together with Copa and Cogeca and CELCAA, which represents commodity traders, stressed that an orderly Brexit – including a transition period – remains “the only way” to prevent the UK’s exit from having a “huge impact” on the agri-food chain.
In its new report this week – called 'Let’s step up to the plate' – FDE warned that “in order to continue to grow, innovate and create new jobs, we need the right business environment in which to operate”. As such, policymakers should put the industry – which, with a turnover of €1,109 billion and as employer of 4.57 million people, is Europe’s leading manufacturing sector – “at the top of the political agenda of the EU in the next five years”.
A dedicated vice-president for the food industry should also be appointed, rather than one limited to agriculture. A Directorate for food should also be established to help make the most of new technology, harmonise food laws across member states and promote a “coordinated and inclusive EU nutrition and health policy”.
FDE director general, Mella Frewen, said: ”As the European Union enters a new and challenging period, EU policy makers will play a decisive role in laying the foundations of stability and prosperity for years to come. This is an important responsibility that will necessitate positive engagement with all stakeholders concerned.”
The FDE paper is available here.
The UK government’s policy paper on a no-deal Brexit is available here.