Countdown to Brexit: consultants air their concerns

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Consultants from FCSI UK & Ireland share their thoughts on Brexit with Chris Evans

The term ‘apocalypse’ currently seems an apt way to describe the Brexit divide. Some see it as the end of the world, others paint it as the true meaning of the word – a new beginning.

This split in opinions also applies to the foodservice sector – and equally the views of its consultant community. With the 29 March deadline for the UK’s withdrawal from the EU looming, some point to potential food shortages, price rises, lack of hospitality staff, transport problems and a decline in tourism. Others, meanwhile, are convinced it is mostly media hype, and that come 1 April, the UK will simply carry on; local staff and goods will be increasingly used and new opportunities with other countries will arise.

For every argument there will be one to counter it. But the talking points remain the same. And top of the list are staffing and food prices/shortages. But what do consultants at the coal-face of foodservice and hospitality think?

The recruitment challenge

“The exodus of Europeans working in the hospitality sector is going to cause a labour crisis,” says Matthew Merritt-Harrison FCSI, chair of FCSI UK & Ireland. “I do not see a large pool of UK staff waiting in the wings to fill the roles. This will put significant pressure on labour costs and make it harder to find quality people to run the industry.

“The only positive on that front is that there will be much greater demand for agency staff and it will force the employers to pay the minimum living wage to staff, because if they don’t pay it, they won’t get anyone.”

The uncertainty around Brexit appears to be putting off food industry organisations from hiring. “February dried up in terms of recruitment, according to a contact of mine at a leading recruiter,” says Vic Laws FCSI, AVL Consultancy Ltd.

“People aren’t changing jobs because of the uncertainty, and mid-market restaurants are struggling, so aren’t recruiting as much.”

But, at the same time Laws believes there will still be plenty of European workers available in the sector, especially after the government has sorted out the work permits and visa issues.

Julian Edwards FCSI, former chair of FCSI UK & Ireland, agrees: “There remain plenty of hard-working EU workers who will continue in the profession, assured by their employers that [their status is] safe.”

Pricing and supply

As for the food pricing and supply outcome, this could vary wildly depending on the outcome of Brexit, and could prove to be the most problematic because nearly one third of the food eaten in the UK comes from the EU bloc.

If there is a no deal exit, food tariffs are expected to rise sharply. Figures being bandied about include an 82% rise for lamb, 31% for processed food and drink, such as orange juice, and 29.5% for semi-processed food. But it is the fresh food that will likely have the greatest impact.

“Most of the suppliers of non-perishable goods are stocking up and putting more stuff in their warehouses, but it’s the fresh products we’re going to be in trouble with,” says Laws.

Stemming from this is the transport concern. Any delays at the Channel ports could add costs because of mandatory EU checks on people and goods entering the EU from the UK. This will affect both imports and exports at Dover and Folkestone because of the “frequent and closed loop nature” of the crossings, the Cabinet Office has said.

A statement issued this week by the Department for Exiting the European Union in December said that in a worst-case scenario, “as a result of French checks and lack of businesses readiness, the flow of goods through the short channel crossings (Dover and Eurotunnel) could be very significantly reduced for months.”

Over the border line

The Irish border issue is another point of concern. “There’s been a media frenzy over the Northern Ireland backstop, which is looking to create an atmosphere of disruption that isn’t helpful,” says Edwards.

“It is critical that relations within Ireland and with the UK remain strong. Food manufacturers and employers either side of the border are continuing to drive back and forth, and hopefully won’t succumb to any extreme bureaucratic changes in the way they relate when it comes to products.”

Overall, all in the food sector agree that procurement and employment procedures will need to be reviewed no matter what the result of Brexit. But the expectation is the world won’t end on 29 March. The UK will continue to set high food standards and will look to alternative food and equipment suppliers, particularly in the short term to help alleviate any initial price rises.

“Most equipment comes from outside the EU anyway. But if we’re in a ‘war’ situation with getting things in and out that will affect everything we’re trying to import. We just need some certainty, after years of uncertainty,” concludes Laws.

Chris Evans