Over half of grocery businesses unclear on Brexit impact as govt tells time for final preparations

Business leaders across the UK food and drink industry remain unclear on the impact of Brexit on their businesses, revealed a new report by Lumina Intelligence, even as the government has urged firms to make final preparations for a new trading relationship with the EU from 1 January.

According to the Top of Mind Report 2020/21 by Lumina Intelligence 56 per cent of business leaders in grocery retail stated that they were unclear on the impact of exit from the trading bloc over the coming 12 months, with a further 14 per cent saying they ’don’t know’.

Just three in ten responded that they have clarity on the Brexit impact.

“Feeling of heading towards the brink with no ability to influence! We need to prepare…but don’t know exactly what to do, and time is running out,” the report cited a grocery retailer as saying.

The government, meanwhile, said a new centre to monitor goods will help ease what it described as “short-term disruption” after Brexit.

With just a month to go before the end of the Brexit transition period, the government reminded exporters and importers that, with or without a trade deal, they must get ready for new paperwork and procedures at the border when the UK leaves the EU’s single market and customs union.

The UK and the EU are still trying to seal a trade deal amid big differences on issues such as fishing and state aid.

In a statement, the government said a new Border Operations Centre would be set up to gather information on the flow of goods and people, adding: “Changes to the way we trade with Europe will likely mean that there is short-term disruption at the border.”

“This (centre) will help us tackle challenges quickly and decisively, and give us increased information which will make us safer and more secure,” said Michael Gove, the minister handling Britain’s divorce deal.

Business Secretary Alok Sharma said he had written to nearly five million British companies to outline “the top actions they need to take”.

The government’s critics say it is putting the onus on business to take the hit from a new customs regime rather than equipping them with the tools to deal with what they fear will be chaos at the border, even if the government secures a deal.

Failure to secure a deal would mean higher prices and shortages of fresh food in supermarkets, the critics say. The Office for Budget Responsibility has said such a failure would wipe an extra 2 per cent off the UK’s economic output.

Even with a deal, companies will have to navigate customs checks and new rules at the border after Prime Minister Boris Johnson early on ruled out staying in the EU’s customs union.

The Top of Mind Report has also found that import tariffs are the top concern amongst both grocery retail and eating out business leaders. Across both channels, businesses remain concerned about the additional costs to be incurred from cross border tariffs, in addition to the availability of goods from the EU.

Sarah Coleman, insights and communication director at Lumina Intelligence, said: “Brexit has caused a great deal of uncertainty and concern to businesses across the UK food and drink industry for some time. Due to the significant impact of the coronavirus pandemic, it is understandable that focus has shifted to fighting the immediate challenges, but the Brexit deadline is looming and businesses need clarity on how they will be impacted and how best to prepare for this.”