Last year, the UK Government announced its flagship EU exports deal, a Sanitary and Phytosanitary (SPS) agreement, designed to ease post-Brexit agri-food trade friction by scrapping many routine border checks. The agreement promised to simplify cross-border processes, cut administrative burdens, and in turn, lower food prices for consumers.
For an industry famed for its thin margins – and where goods are often perishable – the promise of smoother trade flows was significant for UK food and beverage manufacturers. With even minor delays at the border can shorten shelf life and erode profitability, the SPS agreement was seen as a vital mechanism to reduce operational disruption and restore a degree of predictability to EU agri-trade.
However, warnings of poor preparation and staff shortages seem to be already taking the wind out of the agreement’s sails. For food and drink producers, many of whom are still grappling with post-Brexit supply chain friction, it is a stark reminder that regulatory reform is only as effective as its execution. When implementation falters, promised simplification can quickly turn into yet another layer of operational burden.
Pulling back on investment
The turbulence around the SPS agreement is landing at a time when the UK F&B industry is already under strain. Our recent research report, Operations Outlook 2026, found that rising operating costs – such as higher Employer National Insurance and increases to the National Living Wage – are the top challenge for 54% of C-suite leaders. Almost half (46%) of F&B leaders also cited workforce challenges as their primary issue, compared with 30% across all sectors. Recent headcount reductions across major manufacturers reflect attempts to streamline operations.
At the same time, exceptionally wet weather this year has led to UK farmers warning of crop damage, which could lead to further disruption to the agri-food supply chain and shortages on our shelves later in the year.
Against this backdrop, uncertainty over SPS implementation adds another variable into an already fragile operating environment. It is perhaps unsurprising, therefore, that many food and drink leaders are pulling back on longer-term resilience investments.
Our research shows that 53% of F&B leaders are delaying technology investments until market conditions stabilise. Advanced planning systems, predictive analytics and digital transformation programmes – projects that build resilience over time but do not deliver immediate cost relief – are often the first to be paused. On paper, this protects margin, while in practice, it can weaken the capabilities needed to respond when change hits.
Contingency planning for building resilient businesses
Perhaps the clearest lesson from the current SPS regulatory ‘flip-flopping’ is that contingency planning is a must. Manufacturers need to prepare for multiple scenarios, including regulatory ones, at very short notice – whether that’s smooth implementation, delayed rollout, or entirely new compliance requirements.
For agri-food businesses, even small changes to documentation requirements can have major operational consequences, so the ability to be flexible and adaptable is vital. Some firms are already using digital tools to stress-test these possibilities before they materialise.
Digital twins, for example, can create a virtual replica of supply chains or manufacturing networks, allowing firms to model the impact of extended border delays, additional documentation checks, or sudden cost increases. Leaders gain visibility of where bottlenecks emerge and how service levels are affected, before disruption impacts the value chain.
Importantly, this does not require large-scale, high-risk transformation programmes. Firms can take incremental steps, such as improving data integration or piloting analytics in targeted areas.
People and technology need to work symbiotically
When regulation shifts at short notice, resilience comes down to how fast you can see disruption coming, model its impact and re-route operations. Much of this is ultimately a data and decision-making challenge.
While artificial intelligence and automation are increasingly discussed in this context, particularly for managing documentation and forecasting delays, technology alone is not enough. Poor adoption remains one of the biggest barriers to unlocking value from tech, and F&B manufacturers can struggle to attract digital talent, while also facing resistance from employees hesitant to trust or use new tools.
This is where a cross-functional way of working, integrating technology, people, and processes to redesign how organisations work – not just what systems and technology they use – is vital. AI will take tasks, not jobs. The organisations that navigate uncertainty most effectively will be those that clearly articulate the value and purpose of technology.
In F&B, leaders can also connect this transformation to a broader purpose; for instance, safeguarding food supply, reducing waste, or improving the nutritional quality of what people eat. When employees better understand how tools strengthen resilience against regulatory shocks, adoption improves, and capability becomes embedded.
An industry at a crossroads
The uncertainty surrounding the EU exports deal exposes broader operational fragility in the UK F&B industry. While the Government’s intention was to simplify trade, the stop-start nature of regulation has added complexity rather than reduced it.
Manufacturers are already contending with cost and climate shocks, and layering on regulatory unpredictability is further exposing firms that cannot pivot quickly.
The central lesson is that resilience cannot be treated as a one-off, temporary project. With so much compliance uncertainty, smarter supply chain strategies, digital tools, and investing in the workforce are essential for food and beverage firms to absorb future shocks more effectively.
