Food manufacturers 'stockpiling' for fear of Brexit disruption

Brexit | | MIC Customs Solutions |

Widespread stockpiling is taking place ahead of Brexit in case of customs delays.

Some food manufacturers are stockpiling products in the hope of avoiding disruption to their supply chains in the event of a no-deal Brexit in March 2019.

Premier Foods in the UK, which owns brands including Mr Kipling, has told analysts it intends to spend millions building up stock of essential ingredients and packaging before next year's deadline of an exit from the European Union.

It is one of the largest manufacturers in Britain and reported being concerned about the disruption of trade flows and the potential for tariffs to be introduced on some products, which would be likely to slow down customs checks at major ports.

Reports also suggest other manufacturers are following suit and stockpiling food products, with storage firm Wild Water in Wales telling newspaper the Metro that one of its warehouses is already 'full to the brim' with pallets of cheese, fruit juice and poultry products.

Managing director Ken Rattenbury said he is now looking for more storage space because retailers and manufacturers are "ultra-concerned" about the possibility of food being held up at ports once Brexit occurs.

This is a fear that has repeatedly been raised in the run-up to Brexit, with a report from the Chartered Institute of Procurement and Supply recently warning that one in ten British businesses could go bankrupt if even relatively minor customs delays of ten to 30 minutes on shipments occur.

In September, the Centre for Economics and Business Research said it expects UK firms to have stockpiled an extra £38 billion (€44 billion) of goods by next March, citing this as a contributing factor towards recent growth in GDP.

However, it warned that this could be a short-term boost followed by a slump.

The news comes as Brexit negotiations finally reached a breakthrough this week, with representatives from the UK and the EU coming up with a draft agreement.

Special Cabinet meetings are now being held to discuss the text, but any deal still needs to be agreed by UK MPs and each EU member state.