Food Businesses Leaving UK

Published on: 1 Dec 2017

Brexit imageAs much as two-thirds of businesses currently in the UK are planning to leave for the EU, according to recent statistics.

The businesses, which include the food and drink sector, are expecting to take their supply chain out of the UK when new Brexit rules come in.

Survey of businesses

The Chartered Institute of Procurement and Supply, or CIPS, carried out a survey of more than 1,118 supply chain managers. They found that 63% of those managers were expecting to move at least some of their supply chain out of the UK. This could mean that a lot of food jobs are moving out, too.

This statistic comes on the heel of worrying changes in the Brexit talks, which have caused a shift in thinking: only 44% of supply chain managers were thinking of leaving the UK in May.

Half of UK businesses indicated that they are less and less confident in the promised free and frictionless trade deal, believing that it now may not happen. 35% of businesses said that they were so unsure about the future of trade between the UK and the EU that they have not been able to make preparations.

CIPS CEO Gerry Walsh commented, “The Brexit negotiating team promise that progress will be made soon, but it is already too late for scores of businesses who look like they will be deserted by their European partners. British businesses simply cannot put their suppliers and customers on hold while the negotiators get their act together.”

He added, “The success of the negotiations should not be measured on the final deal only, but on how quickly both sides can provide certainty. The clock is ticking.”

The lack of clarity in the dealings, which are all being made behind closed doors, is another factor which is shaking British faith in the results.  

Split in services

Supply Chain40% of UK companies who had suppliers in the EU, however, said they have begun to search for domestic suppliers. This could indicate an upcoming split in businesses, with some choosing to put their business only in the UK and others choosing to operate only in the EU.

A large number of businesses are still adopting a wait-and-see approach. The UK will officially leave the EU in March 2019, and this is causing problems for some. 20% of UK businesses who had EU suppliers said they were finding it difficult to secure contracts which would run past this date.

8% of UK businesses say that they have already lost contracts with suppliers because of Brexit, and 14% believe that at least part of their organisation’s operations are no longer going to be viable when the deal goes through.

25% of businesses who have more than 250 employees say that they have splashed out on preparing their supply chain, spending at least £100,000. Despite this big spend, only 14% think that they are actually ready for Brexit to take place.

Leading supply chain experts are now starting to warn businesses that they may need to prepare for a ‘hard’ Brexit just in case it comes to pass. This could have serious consequences for food recruitment in the UK and beyond. We are yet to see what will come to pass, but one thing is certain: there will be some kind of impact.

After releasing the details of the survey, it seems that the Department for Exiting the European Union did not prepare a response to the CIPS statements. Many would say this is indicative of the entire process so far, which has left voters and workers alike in the dark.