As Boris Johnson’s government continues to stick to its pledge to leave the EU with or without a deal on October 31, Retail Week looks at what grocers and suppliers are doing to avoid food shortages in the days and weeks after the Brexit deadline.

A lot has already been written and said about what might happen to the UK’s food supply chain in the event of a no-deal Brexit come October 31.

However, the publication by The Sunday Times of the ‘Operation Yellowhammer’ dossier – a series of leaked government documents highlighting the enormous gaps in the government’s contingency planning in the event of a no-deal Brexit – has highlighted the very real possibility of food shortages in the days and weeks after the UK leaves the EU.

The documents posit that “the availability of fresh food will be reduced and prices will rise”; there will likely be “significant disruption at ports [that] will last up to three months before the flow of traffic improves”; and “up to 85% of lorries using the main Channel crossings may not be ready for French customs and could face delays of up to two-and-a-half days”.

What are grocers doing to try and minimise this eventuality?

Fresh produce hit hardest

While the UK is not going to run out of food after a no-deal Brexit, there is acceptance among the grocery and food sector that there will be availability shortages – particularly with fresh produce.

A senior source at a national grocery chain says: “Fresh is going to be the big challenge for any food retailers. It’s not like you can stockpile because it’s just perishing in a warehouse somewhere.”

Empty shelves bread

Grocers are bracing the public for gaps on shelves in the weeks after October 31

The source says the grocer has sought to minimise the inevitable disruption to the grocery supply chain by moving to British sourcing where possible. But due to issues around seasonality, only so much can be done.

“There are things you can do – you can switch to British produce to a slight extent – but the reality is that a lot of product is seasonal,” he says.

“On a handful of lines, for example, we’ve moved to British sourcing. So, with biscuits, we’ve moved all of the product sourcing from Holland to the UK to eliminate the need to cross a border from the EU to the UK. Whereas for the Irish part of the business, we’ve left the sourcing to Holland, so it remains EU-to-EU.”

The grocery source is adamant however that, in the event of a no-deal Brexit, there will be issues around availabilities on supermarket shelves in the days and weeks after.

“If there is some disruption at the ports, there will be disruption to availabilities. I think everyone in the sector is pretty much resigned to that fact. It’s just to what extent that nobody quite knows yet.”

One grocery sector analyst says grocers such as Morrisons, which has a predominantly vertically integrated, British supply chain, will do better out of a no-deal Brexit scenario, whereas others such as Tesco and Sainsbury’s, which tend to source more products from the EU and beyond, will see availability of fresh produce lines more severely affected.

Cutting the red tape

One of the few positives to come out of conversations on the topic is the fact that grocers and suppliers already had a dry run at planning for a no-deal Brexit in March.

A senior leader at a supply chain analytics firm says the preparations made for the UK to exit the EU earlier this year made a lot of grocer and suppliers “take an interest in better understanding data around where products are and how they’re moving through supply chains”.

“That’s come to a head in the last year or so, where we definitely saw grocers working harder around March to build up a pool of stock, particularly in ambient lines,” he adds.

One source at a grocery sector membership body says it will be down to suppliers to ensure they have the correct paperwork in place from October in the event of no-deal, that drivers have the right documents and training to minimise waiting times at customs checks on the border, and that they may need to be willing to take on the costs associated. 

Lidl echoed this sentiment last week when it sent letters to its suppliers asking for confirmation that they would be “deliver duty paid-ready” in the event of the UK leaving the EU without a deal.

However, one senior grocery executive admonished Lidl’s tactics.

“It’s not credible to just flat-out write to your suppliers, particularly in such a small market, and say: ‘Take this 20% cost increase on the chin.’ That’s not going to be our approach,” he says.

Empty shelves veg

Leaked government documents said ‘availability of fresh food will be reduced and prices will rise’

“If there is going to be a cost increase, where is that going to sit? Is it going to be in the form of a marginal retail increase that takes a small proportion of it, we take a small proportion of it and the supplier takes a small proportion of it? It’s part of the wider discussions.”

The membership body source says all suppliers should look into acquiring an Economic Operator Registration and Identification (EORI) number, which allows suppliers to ship goods into or outside of the UK from third countries.

This paperwork, which the source describes as being “very complicated to obtain”, was previously not needed for importing and exporting goods to and from the EU because of the UK’s membership of the single market. 

A source at the Fresh Produce Consortium says many of its supply chain members are medium- and smaller-sized businesses, which includes grocers such as Asda, the Co-op and Iceland, as well as suppliers and wholesalers. They have never needed to apply for EORI numbers before.

“Some people have left arrangements until now or even beyond because they expected the UK to reach a deal with the EU and life to go on. Now, we’re telling them to look at organising themselves rather seriously,” she says.

Alternative routes

Numerous sources also say many grocers and suppliers have explored the possibilities of opening up different routes across the Channel to avoid the inevitable congestion around the main ports of Calais and Dover in the event of no deal.

The senior source at the supply chain analytics firm says he has seen “some interest in opening up lines into the Netherlands as a route that may offer additional capacity” and “rumours about retailers potentially looking to open additional depot sites and stock buffers”.

Director of food and sustainability at the BRC Andrew Opie says, currently, fresh produce almost all comes through Calais to Dover, because it has the most daily ferry crossings and is also linked by the Channel Tunnel.

“Consumers in the UK have had it good for 50 or 60 years now… they are going to find their habits have to change because we won’t be able to do everything for them tomorrow that we can do today”

Stuart Rose, Ocado

While there are many other crossings available, such as from Le Havre into Portsmouth, or the Belgian port of Zeebrugge into northern cities such as Hull, Opie says there isn’t the infrastructure required in these alternate ports to fill in the supply chain gaps in fresh produce to offset disruption triggered by a backlog at Dover.

“The problem is that in ports such as Le Havre, there may only be two crossings per day. At the moment, most lorry drivers don’t even buy specific tickets for a specific crossing from Calais to Dover or vice versa. They just turn up and there’s a ferry every half hour or, if there are any problems, they just take the Channel Tunnel,” says Opie.

“However, if they start looking into Le Havre and they miss one ferry, then they may have to wait seven or eight hours for another one. That’s building in added delays.”

The issues are not so serious when it comes to ambient and longer-life products, many of which already come into the UK via alternative routes to Dover. This is because many ambient products can afford to be kept in storage longer, so do not need to be transported as quickly.

Whatever happens, the supply chain source says retailers will need to quickly communicate changes to suppliers. “The clearer they can be about what they do and don’t know, about what volumes they are potentially going to need, the better. The biggest challenge for suppliers is uncertainty.”

Public messaging

Grocers have already taken steps to alert the public to the likelihood of gaps on supermarket shelves in the event of a no-deal Brexit.

Former Sainsbury’s boss Justin King waded into the debate on Newsnight earlier this month when he warned there would be “significant gaps” on UK grocery shelves in the event of a no-deal Brexit, as the UK has “a very small number of days in fresh food” in its grocery supply chain at any given time.

An industry analyst agrees with this sentiment. He says consumers may have to learn to live without “more exotic” fruits and vegetables – such as some citrus fruits and avocados – in the weeks after no deal. “There’s going to be a lot less choice on shelves, certainly in the short term,” he says.

One supermarket source explains that, regardless of the levels of disruption, knowing when or even what to say to the public is a challenge.

Lorries at Dover

Grocers and suppliers have looked at new routes to avoid congestion in Dover

“You don’t want to end up in a situation whereby you start talking about panic buying and then inadvertently create it because people wonder why you’re talking about it in the first place. Until you know how big a problem you’ve got, it’s difficult to understand how you position that to the customer,” he says.

“Also, there’s a debate as to what messaging to use. If you say: ‘Don’t worry customer, we’re working hard with our supplier base to manage availabilities during this difficult time’, you’ll annoy the 50% of the population for whom this isn’t difficult at all. For whom this is a time for champagne celebrations.”

Regardless of how grocers communicate their message, Ocado chair Lord Stuart Rose says there is only so much the sector can do to avoid food supply chain disruption and that shoppers should be prepared.

Speaking on BBC Radio 4 this week, Rose said: “You can’t defy gravity and you can’t in fact go contra-seasonal. Our consumers in the UK have had it good for 50 or 60 years now, expecting to go into their supermarkets on a daily basis and buy a wide range of products.

“If we do have difficulties with a hard Brexit and there is some interruption of supply, they are going to find their habits have to change because we won’t be able to do everything for them tomorrow that we can do today.”

Whatever mitigating steps grocers and suppliers put in place, the reality is customers will need to adjust their expectations of what they can – and cannot – pick up in their weekly shop after Brexit.