Prime Minister Theresa May is nearing the half-way point in a two-week battle to get her Brexit transition deal through Parliament.
Meanwhile, businesses remain in the dark as to what will eventually emerge – scrabbling behind the scenes to formulate contingency plans that could soften even the most dramatic of Brexits.
A scenario that remains very much in sight is that of a no deal Brexit.
UK supermarkets, which are reliant on the frictionless transportation of food to and from the EU, hope it won’t come to that, but have to be prepared… just in case the UK does crash out of the EU on March 29 at 11pm without a deal.
A customs control point at Dover docks – supermarkets fear stock could go off in long queues
As the likes of Tesco, Sainsbury’s and Asda have warned over the last year, there could be immediate hold ups at the borders if an agreement is not reached that ensures the free flow of goods from Europe.
Tailbacks are most likely on the route between Calais and Dover, as well as in the other direction between London and what is the UK’s busiest port.
The supermarkets are keeping exact contingency plans quiet, claiming that they are commercially sensitive. The British Retail Consortium insists that they are being proactive, however.
Just over 40 per cent of all the UK’s food is imported (three quarters of which comes from the EU) meaning that supplies of certain foods – especially fresh fruit and vegetables – could run out within days of Brexit.
EU tariffs may be imposed too, pushing up the price of food and eating into grocers’ already wafer thin margins.
Queues of lorries could form in the other direction too on the M20 between London and Dover
In the summer, Sainsbury’s chief Mike Coupe was vocal about the possibility of fresh food rotting at borders, while Tesco chief executive Dave Lewis spoke out about tariffs leading to price hikes.
Asda boss Roger Burnley chimed in and said ‘any prospect of a hold up – that includes the southern Ireland border – would have very significant consequences’ for Walmart-owned Asda.
Concerns about food supplies were widely dismissed as ‘scaremongering’, with May telling the nation that people needn’t worry, nor start stockpiling food.
But as the deadline for Brexit approaches, without much further clarity on what it will entail exactly, UK supermarkets are moving from talk to action.
Fresh food is the main point of concern as it has a limited shelf life and can not be stockpiled
How are supermarkets preparing for a no-deal Brexit?
The British Retail Consortium (BRC), which is campaigning for a deal that safeguards frictionless, tariff-free trade with the EU, claims that ‘retailers are doing everything they can to put in place contingency plans to mitigate against the grave effects of a no-deal Brexit’.
And, according to the BRC’s head of food Andrew Opie, these damage control efforts have ‘accelerated’ in the last few months, with grocers taking definitive action to defend themselves from the potential cliff edge.
Speaking to This is Money, Opie says the BRC has been working closely with supermarkets to explore new ways of getting food into and out of the UK and to help keep suppliers prepare for the worst.
But the word on everyone’s lips at the moment is ‘stockpiling’.
The pitfalls of stockpiling food
Most consumer firms prefer to steer clear of politics, and have remained tight lipped on Brexit, but some have admitted that they are or will stockpile food to help limit shortages.
Tesco’s Dave Lewis made waves last month when he said Tesco would start stockpiling dry goods after Christmas unless a deal is struck.
Tesco boss Dave Lewis (above) said that Tesco would consider stockpiling after Christmas
Since then talk of stockpiling has become all the rage.
Majestic Wine said it is piling up between £5million and £8million worth of wine to ensure stock keeps flowing. Likewise, Premier Foods says it is actively storing raw materials – a move that could cost the Mr Kipling-maker as much as £10million.
However, fresh food remains the biggest issue.
As Lewis warned last month, ‘the possibility of stockpiling fresh food is very, very limited’.
The same goes for all supermarkets, reliant on perishable fresh food imports that can’t be stockpiled. After all, not everything can be grown in the UK all year round.
Aldi joined Sainsbury’s and Tesco in pointing to the limitations of stockpiling fresh food
What makes the matter worse, Opie points out, is that Brexit is timetabled for March, when the vast portion of the UK’s fresh produce, including soft fruit, tomatoes and lettuces, is imported from the continent and funnelled through Dover.
Another problem with stockpiling is a severe lack of storage space in the UK supply chain.
Sainsbury’s, for example, has about 20 distribution centres in the UK that can each hold about a week’s worth of food.
And as businesses from a host of different industries, from carmakers to medicine firms, seek to put some supplies in storage, already sparse available warehouse space is quickly drying up.
The Food and Drink Federation told MPs in the Commons business committee earlier this week that all available frozen and chilled space had been taken, speculating that warehoused have been snapped up by Amazon as the online giant mulls launching a full scale grocery offer in the UK.
The Food and Drink Federation implied that Amazon could be holding onto some of the UK’s warehouse space, making stockpiling more challenging
So, what else can supermarkets do?
Most firms are trying to keep lids on their contingency plans – however vague – under the veil of commercial sensitivity. But the BRC insists that supermarkets are being proactive.
Some are considering swerving Dover and using alternative ports, such as Southampton and DP World London Gateway instead.
But, this option is seen to be extremely limited, Opie points out, as the UK’s other ports are not properly equipped. Firms would need expensive fleets of trucks to take delivery of the containers.
And even then, he says, it wouldn’t make up for sheer volume of food imported via Dover.
‘At the moment, in the run up to Christmas there are 130 lorries full of citrus fruit going through Dover every day. When we get to those sort of volumes, you’re going to lose a big chunk of that capacity,’ Opie says.
Some suppliers are even exploring the possibility of buying in new, different fruits and vegetables – ones with a much longer shelf life the could survive a few days longer in transit than, say, strawberries, which typically have around 8 days from being picked to being past their best.
Meanwhile, supermarkets are working closely with their suppliers to help understand the implications of Brexit and iron out any negative impacts, including tariffs, issues with ingredients, packaging materials, labelling and the number of EU staff they employ.
Will it suffice?
Opie fears that, given the prominence of Dover and the looming threat of tariffs, efforts taken by supermarkets will not go far enough in the event of a no-deal Brexit.
‘Supermarkets are doing a lot and are as prepared as they can be, but will it compensate for what is likely to be lost? No,’ he says.
Brits may have to stomach different foods ‘and pay more for it’, he concludes.
There are fears that the price of food could go up in the event of a no-deal Brexit
But others worry that supermarkets, like a whole host of other businesses, have not yet done nearly enough to prepare – awaiting more clarity or a definitive answer before map out a course of action.
Speaking as Aldi posted full-year results last month, Aldi’s UK boss Giles Hurley admitted that the discounter does not yet have a ‘detailed’ Brexit plan in place, owing to a lack of certainty around the deal.
And when This is Money asked supermarkets about their individual Brexit preparations, none were too willing to share.
Iceland declined to comment.
A Lidl spokesperson said: ‘We have a dedicated task force in place which is engaging closely with the BRC and government departments to ensure that we are kept informed of the latest developments and prepared for various scenarios.’
But the grocer wouldn’t go into any more detail.
Lidl has not shared any details of its contingency planning for a no-deal Brexit
And Sainsbury’s was unwilling to add to the few lines of detail on Brexit it shared at its half-year results: ‘As negotiations continue, the Board will monitor outcomes, assess the impact on customers, colleagues and supply chains and implement an appropriate response.’
That’s not to say Brexit isn’t a huge priority for UK supermarkets, and they have a right to keep a lid on their plans if they wish.
But ‘if ever there was a time to collaborate and share ideas,’ one retail advisor said to me this week, ‘this is it’.