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Brexit: UK food companies ‘increasingly scared’ about no-deal

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LONDON — Theresa May’s government is failing to listen to the growing concerns of the UK Food and Drink industry about the “catastrophic” effects of a no-deal Brexit, the head of the leading body representing the industry has told Business Insider.

The chief executive of the Food and Drink Federation, Ian Wright, told BI that the industry was “increasingly scared” that Britain could now be facing a no-deal Brexit after May’s deal with the EU was defeated in the UK Parliament.

Since the defeat, May has insisted that the government will not seek to delay Brexit, which is due to take place on March 29, even if it means leaving without a deal.

However, Wright warned that the industry was completely unprepared for a no-deal exit.

“We [food and drink companies] are at the pointed end of this. We are not going to be even remotely ready,” Wright told BI.

“We keep telling them [the government] that it is potentially catastrophic but it is difficult to know just how much they’re listening.”

Wright said that he now believed that a no-deal Brexit was more likely than not.

“I believe the likelihood of a no-deal Brexit is now over 60% in light of last week’s events,” he said.

Wright added that if MPs didn’t take decisive action in the next few weeks, a no-deal is “all but certain” and added: “This would mean really bad economic consequences for everyone in this country not seen since the war.”

“This would mean really bad economic consequences for everyone in this country not seen since the war.”

Representatives from the food and drink sector hold weekly meetings with government ministers to discuss the state of Brexit, including no-deal readiness.

While most government ministers are aware of the risks posed by a no-deal Brexit, it is now too late to prepare many areas of the UK food and drink business for that potential scenario, Wright told BI.

For example, certain labels that food and drink companies put on their products will become illegal on March 29 if the UK leaves the EU without a deal. However, it could take months for new labels to be produced.

“It is not a case that time is running out. For many of these things, time is up,” Wright said.

He suggested that some Cabinet ministers either do not understand or are choosing to ignore what would happen if the UK left the EU without a Withdrawal Agreement on March 29.

“Most ministers get the seriousness of this but it appears they are struggling to convey it to all of their colleagues,” he said.

‘We are potentially f*****’

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In a meeting of food and drink company heads following the meaningful vote on the prime minister’s deal last week, it was agreed that the risk of a no-deal Brexit had increased significantly, attendees have told BI.

One senior industry figure told BI that one in five UK food and drink companies with 20% or more their exports sold to the EU would collapse within weeks of the UK opting for a no-deal.

Around 70% of the UK’s food imports come from the EU and industry leaders have warned that the emergence of new tariffs and border checks could lead to empty supermarket shelves and a rise in food prices.

One attendee who wished to remain anonymous told Business Insider: “We are potentially f*****.

“It is not a case that time is running out. For many of these things, time is up,”

The Food and Drink Federation now estimates that within the first six to eight weeks of a no-deal Brexit, food prices could rise by up to 10% and certain foods will run out, the most likely being fresh fruit and vegetables.

Last week the FDF called on the government to use “political leadership” to find “an alternative that prevents further damage to the UK’s wider economy” after MPs rejected Theresa May’s Brexit deal.

However, the prime minister has so far refused to consider alternatives to her deal, such as a permanent customs union or a second referendum. Instead, she is pursuing changes to the current agreement in hope of getting it through Parliament.

The Department for Exiting the EU has not responded to our request for comment.

‘Frightening’

Brexit Secretary Stephen Barclay.
Alberto Pezzali/NurPhoto via Getty Images

Liberal Democrat MP and supporter of anti-Brexit group Best For Britain told BI: “These frightening revelations yet further reinforce that those who think that no deal would be no problem are sadly living in a fantasy land.

“It is shameful that we currently preside over a society in which food bank usage is at its highest level ever. If we leave without a deal and food prices rocket, the result will be greater poverty, greater need and greater misery for families who seek to budget for their weekly food shop.”

He added: “The 52% that voted to leave the European Union did so for a myriad of reasons, but not a single one that I’ve met voted to send people to food banks. Leaving with no deal does not honour the referendum result.”

“It’s time to give the people the final say.”

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