On March 14, 2020, shopkeepers encountered somewhat empty shelves at a supermarket in London, when an outbreak of the corona virus led to stockpiling.
Justin Dollis | AFP | Getty Images
As the Brexit trade deal negotiations between the EU and the UK go awry, British grocery stores are stockpiling food in the absence of any contract.
According to the Sunday Times, supermarkets were told by government ministers to stockpile non-perishable items, while lawmakers said “there is no deal on the cards, Brexit.” A UK government spokesman was not immediately available for comment when contacted by CNBC.
There have already been widespread warnings from business leaders about possible new food shortages, delays in delivery from the continent and rising prices in the absence of a deal — the UK and the EU have failed to accept the post-Brexit trade deal.
Both sides have until Dec. 31 to agree on a deal, and although talks continue at this late stage, they have warned that any deal could have unintended consequences.
On Sunday, however, British Prime Minister Boris Johnson and European Commission President Ursula van der Leyen agreed to “go the extra mile” and advised negotiators to continue.
The food retail industry has been closely monitoring the negotiations, but the leading chains have already taken steps to alleviate the non-contractual situation.
Okado, an online grocery store, has been stockpiling longevity products such as Italian beer, according to a report last week, while the head of Tesco said his business is “trying to make sure we can store longevity products in our warehouses as much as possible.” Or with our suppliers. “
Speaking to Bloomberg, John Allen warned that high food prices would be “unavoidable” without the deal, and that food bills could rise by an average of 3-5% from January. He urged shoppers not to panic, however, as some food items such as continental cheeses can be found and prices can skyrocket.
“We can see a shortage of new foods, especially short-lived new foods. I think it will only be for a certain period of time, maybe a month or two, before we get back to normal,” Allen said.
Dominique Robb, the UK’s foreign secretary, denied the Tesco’s chairman ‘s comments last Thursday, saying he did not care about the price hike. “In all that can be a challenge, I don’t care if the supermarket shelves are simply running or the price of food,” he said, “but there will be some bumps in the road if we don’t get it” is a free trade agreement. “
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There are fears that uncertainty about a deal could spark panic among consumers.
In the absence of an agreement, the current free trade relationship between the UK and the EU will abruptly end on December 31, and both sides will default to WTO rules. Both parties can tax each other’s imports, increasing the cost of doing business and leading to higher prices for consumers.
The British Retail Federation said businesses were preparing for a situation where there was no contract, while warning consumers against stockpiling goods.
“Retailers are doing everything they can to prepare for all events on January 1st – increasing the share of tins, toilet rolls and other long-lived products so that essential items are available in sufficient quantities,” said Helen Dickinson, CEO of PRC. In a statement on Sunday.
“While no product of retailers can completely prevent disruptions, the general public does not need to buy more food than usual because there will be a major impact on imported new products such as fresh fruits and vegetables that cannot be stored for a long time by retailers or consumers,” he said. .
The PRC warned that without a deal, the British public would face $ 3 billion ($ 4.02 billion) in food bills, and told retailers that “there is no other option but to pass on some of these additional costs to their customers.” Higher prices are filtered out in 2021. “Furthermore, it said the new checks and red tape applicable from January 1 would place an additional burden on retailers and their customers.
Like other sectors most vulnerable to non-contractual consequences, such as car manufacturing, the PRC must do what it needs to do to agree to a zero-fee agreement with the UK and the EU, otherwise it will pay the price for this failure. “
Given the corona virus outbreak, consumers are likely to be hit hard by higher food prices and stocks after an already tough year, and additional difficulties for home financing.
Removing regional corona virus controls for Christmas will also increase the demand for supermarkets for products. This is said to be due to the backlinking of containers of personal protective equipment at a time of supply problems due to a blockage at one of Britain’s largest ports on Felixstowe on the east coast of the UK.