Speaking at a Business, Energy and Industrial Committee meeting yesterday (28 November), Nestlé corporate communications director Ian Rayson told MPs the company had been stockpiling products it needed to import into the UK and the reverse in Europe.
However, it warned that warehouses for frozen and chilled food were nearly full and its ability to stockpile more food was limited by factory capacity and storage space, as well as the fact that some ingredients had a limited shelf-life.
“We are stock building at both ends, but these are only for periods of weeks,” said Rayson. “You can prepare for a no-deal exit, but you cannot mitigate the risks of a no-deal Brexit.
‘Consequences would be severe’
“The consequences of it would be very severe and should be avoided and that’s the honest truth.”
Food and Drink Federation (FDF) chief executive Ian Wright echoed Rayson’s concerns surrounding stockpiling, commenting that there was no bookable space remaining in warehouses that can store frozen or chilled produce in the near future.
“We don't know if there are products in those places or people have booked the space to be careful or for production,” said Wright.
“Some innovative providers are doing the Airbnb of warehousing, which is very interesting, but for big and medium-sized businesses, that just won’t work.”
Space for ambient
Wright mentioned that there might still be space to store ambient foods, but that it was not available where it was needed in companies’ supply chains.
“Those warehouses are not close to the correct infrastructure or supply chains. The issue is geographical, as well as conceptual, and is why the intersection around Rugby is such an enormous growth area,” Wright added.
Meanwhile, British food and drink manufacturers that have considered stockpiling ahead of Brexit are now being faced with increased costs while business confidence dips further.
According to the FDF’s latest business confidence survey, over a third (38%) of food and drink manufacturers had reported an increase in costs as a result of stockpiling ahead of a possible ‘no-deal’ Brexit.