Brexit fears cause shortage of stockpiling space

#Brexit special section Daily news Economy

Firms looking to stockpile extra food supplies to insure against a hard Brexit are finding that warehouses are fully booked, MPs have been told.

Ian Wright, head of the  Food and Drink Federation, said storage facilities for chilled and frozen food are at capacity and space for other goods is limited in certain areas.

He told the Business, Energy and Industrial Strategy Committee that there was no space left in frozen or chilled produce warehouses in the near future.

“We don’t know if there are products in those places or people have booked the space to be careful or for production,” he said.

“Some innovative providers are doing the Airbnb of warehousing which is very interesting, but for big and medium-sized businesses, that just won’t work.”

There is space for ambient goods – those that can be stored at room temperature – but it is often not in the right location for company supply chains.

Mr Wright said he supported the Draft Withdrawal Agreement negotiated by Prime Minister Theresa May only because it was better than leaving the EU with no deal.

He told MPs: “The political declaration is excellent, but it is a list of new year’s resolutions. We don’t know if what we see now will remain intact.

“We like what we have now. No deal is infinitely worse than anything we could imagine, therefore the deal on the table is better than no deal, but not as good as the status quo.”

Also in front of the committee were drinks producer Diageo’s corporate relations director Dan Mobley and Nestle director of corporate communications Ian Rayson.

Mr Rayson said: “We are stock building some products to bring into the UK and stock building in Europe products that we would send out there.”

Diageo is waiting to see how the UK leaves the EU before making decisions on stocks, Mr Mobley said.

He added: “If we are going to face a chaotic Brexit, that will pose problems for us and we will work out market by market if we need to increase shipments.”

“We’ve put in place planning so we can manage a no-deal without any disruption to customers.”

Other companies in a range of sectors have also been taking steps to protect supplies in the event of a hard Brexit. They include:

  • Premier Foods says stockpiling of supplies could cost it up to £10m.
  • Mondelez, owner of Cadbury, is stockpiling ingredients, chocolates and biscuits.
  • Airbus, which manufactures aircraft wings, has asked suppliers to stockpile parts.
  • Drug firm AstraZeneca is increasing European drugs supplies by around 20 per cent.

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