Business groups warn that Brexit will increase food supply chain costs

The Food and Drink Federation has warned that the new bureaucratic elements involved with Brexit are likely to increase food supply chain costs. These will either be passed on to consumers or absorbed by retailers. Other industry bodies warned of further possible shortages in Northern Ireland supermarkets, and more costs for manufacturers.

Food and Drink Federation chief executive Ian Wright told MPs that there will be short and long-term costs to "re-engineering" supply chains. There will be extra food supply chain costs due to more paperwork, Wright told the Future Relationship with the European Union Committee on Wednesday.

The BBC quoted him as saying: "Unless the deal changes in some material way, we're going to see the re-engineering of almost all the EU-UK and GB-NI supply chains over the next six to nine months. In the short term there will be costs and time wasted for supply to reach the shelves, and in the long term will be costs and changes, and fairly significant changes, to the way in which manufacturers in the UK and in the EU interact when they are producing product.”

Wright criticised the bureaucracy that his members are now facing when trying to export from the UK to the EU. He used the example of one company that used to complete the necessary paperwork within 3 hours, but it was now taking them 5 days.

He said the government had struck a deal with the European Union too late for food and beverage companies to get ready for the new regulations which came into force at the end of 2020.


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