The recent appointment of Boris Johnson as the new Prime Minister has put the spotlight on the future of Brexit once more and whether Britain will leave the European Union with an agreement in place.
As the deadline of 31st October looms ever-closer, the reality of businesses and individuals stockpiling goods because of fears of shortages is hitting the headlines again, as the PM finds himself at the helm during a period of great transition.
In the referendum on 23rd June 2016, when the British public first voted to leave the EU, few people could have foreseen the chaos that would arise as a result.
© Kadmy / Adobe Stock
No deal “disaster” predicted
Since the referendum, when 51.9% of voters supported leaving the EU, former Prime Minister Theresa May has failed to reach an exit agreement which would benefit the UK. Now, since becoming PM on 24th July, Mr Johnson has been tasked with resolving the problems in just three months.
The former Brexit minister, Steve Baker, has warned that “disaster awaits” if no strategy is in place by 31st October. As the uncertainty rumbles on, UK retailers are increasingly concerned that a “no deal” exit from the EU would cause chaos.
Some sectors have started stockpiling goods amid fears there will be no deliveries from Europe, leaving British shelves empty towards the end of the year. Supermarket bosses say a no-deal Brexit will cause transport chaos, leading to food shortages.
The UK has always relied heavily on imported items from the EU, but if we suddenly leave, this will impact supply chains, leaving us on our own if there isn’t an appropriate deal in place. Statistics show that in 2017, 53% of UK imports, at a total value of £341 billion, came from EU member states.
We are currently part of the customs union, so there are no tariffs on goods being moved between EU countries, but the UK needs to renegotiate new trade deals with EU countries before leaving. This has been a stumbling block for years.
Retailers who currently import products through existing EU trade deals may discover their supplies will suddenly dry up, as an increasing amount of red tape causes delays. Goods that do make it through may be subject to price hikes.
The major supermarkets, such as Sainsbury’s, Asda, Lidl and Marks and Spencer, have voiced fears that the UK is “very reliant” on food products from EU countries. They say some products, especially fresh produce, can’t be stockpiled for practical reasons. The British Retail Consortium says a no deal Brexit will have a “severe impact” on our shops.
Factories stockpiling too
Factories in the UK are also stockpiling goods at a high rate, which has boosted manufacturing growth to its highest level in 13 months.
Research by IHS Markit/CIPS revealed stocks had increased significantly for the third consecutive month, following a trend for increases that has continued for the past 32 months! However, city analysts say the boost to our economy will be short-lived, as it will all come crashing down if we suffer a no deal Brexit.
Studies have shown that companies in the EU are already sourcing goods away from UK firms as the Brexit deadline approaches, in order to avoid the anticipated chaos. Any sustained period of uncertainty post-Brexit will hit the manufacturing sector hard.
Businesses are using any spare cash to buy imports and stockpile goods, rather than investing it in expanding their company, as they might normally have done.
Shoppers prepare for “emergency”
Consumers are also stockpiling food as the climate of uncertainty continues. People known as “preppers” and “survivalists” are stocking up in readiness for a potential emergency at the end of October.
Celebrity prepper Andrew Rawson, a well-known stockpiler, has been squirreling away plenty of food items and has detailed how others can follow his lead in his book, Preparing for Brexit: How to Survive the Food Shortages.
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