< Back to news 14 March, 2019

Brexit – Prepare For The Worst, Hope For The Best

Brexit has been on everyone’s agenda since the UK voted to leave the EU in June 2016, with businesses and individuals alike doing the only thing they can - preparing for the worst and hoping for the best.

Beacon, Britain’s leading procurement company, has been working with its suppliers to ensure continuity of supply and availability of products and to identify steps that both suppliers and operators can take to prepare for the unknown, mitigating the risks a ‘no deal’ scenario could cause.

Batten down the hatches
The supply chain in general is one of the biggest concerns for suppliers ahead of leaving the EU. With reports that border controls, port delays and increasing price tariffs could threaten the stock and shelf life of various products, suppliers are doing everything they can to prepare, avoid risks and make the transition as smooth as possible.

Umbrella

Insourcing is a tactic suppliers have started to utilise, with a number of them moving operations to the UK from overseas in a bid to avoid cost increases and shipping delays. Beacon’s suppliers have been working hard to limit the potential issues:

Molson Coors produces and packages 90% of its products in the UK but has undertaken a comprehensive review of its supply chain ahead of Brexit. In this review, it has surveyed its top 50 suppliers to gain a greater understanding of their ability to avoid any unwelcome surprises and to ensure the continuity of supplies after March 29th. Heineken UK has 89% of its beer and cider insourced, which naturally mitigates some of the risk.

McCain Food Ltd, is the largest purchaser of British potatoes, buying around 15% of annual British potato crops. McCain has invested in the rebuild of its production facility in Scarborough. This investment celebrates 50 years of manufacturing in the UK, and will help McCain continue to deliver the best quality products possible.

The majority of Beacon’s suppliers use raw materials that are sourced and produced in UK facilities wherever possible, which provides customers with the stability of assured supply both pre and post Brexit. Stockpiling key ingredients and managing inventory levels also ensures suppliers can continue to meet regular demand.

Don’t miss the boat!
The UK’s border controls are expected to change immediately after we leave the EU. Some of our favourite continental flavours will have to undergo additional checks after Brexit, in addition to the above and beyond the existing custom checks that are already in place, making transport disruptions a certainty. Port chiefs at Dover have claimed a two-minute delay at the port would lead to a 17-mile queue of lorries on the M20[i], which could affect fresh food supplies and their shelf life. To avoid this, suppliers are utilising storage facilities with Beacon’s supplier, Calor investing in one of Europe’s largest liquefied petroleum gas (LPG) facilities to ensure their imports are not dependent on EU supply routes.

Ferry

Transport disruptions are a risk for all business. The vast majority of Beacon suppliers have already put contingency plans into place, increased buffer stock numbers as a temporary measure and are still working to identify permanent solutions ahead of March 29th. Beacon’s suppliers are in the process of confirming all logistics providers have Authorised Economic Operator (AEO) accreditation. The AEO accreditation works much like a trusted traveller fast track system at customs borders and will enable providers to move through border controls as quickly and efficiently as possible.

All hands on deck
There are 3.7 million EU citizens currently living and working in the UK, a number of who are employed in the food or foodservice industries, but following the EU referendum in 2016 questions began to arise over their residential status. The Government later announced that EU citizens who are already residents in the UK, or move to the UK before midnight on the 31st December 2020 can apply for Settled Status, which will allow them to continue living in the UK, even in a no deal scenario[ii].

It is crucial that operators, suppliers and business owners ensure that their staff members who are European citizens feel supported and have access to practical advice on how they can apply for Settled Status in the workplace. Beacon’s supplier, Direct Seafoods has increased its emphasis on developing staff within the business ahead of Brexit. It understands there will be increased competition for the best talent in the industry, following reports that up to 47% of EU citizens are considering leaving the UK in the next five years[iii], so is focusing on improving staff packages and opportunities for development to attract and retain staff post Brexit.

Whilst retention incentives are being put in place by business owners to protect their workforce with benefits including increased holiday, enhanced training opportunities and higher pension contributions being introduced, it is not necessarily enough. What is key is that, above all else, businesses and HR departments can support their employees and reassure them that they are valued throughout the emotional turmoil that Brexit has already had on the whole of the UK. Beacon, and its supply base is prepared for all Brexit outcomes, in order to offer its customer base continuity of supply.

To discover how Beacon and our supply partners can help ease procurement challenges over coming months, call us on 01904 695588.