WHAT DOES BREXIT MEAN FOR SMALL FOOD BIZ?
On June 23rd the country awoke to news that the majority of voters had chosen to leave the EU. Since that point there has been quite a bit of confusion as to what’s going on. Would we ‘push the button on article 50’? Would we stay in the single market? What would happen about immigration? And who would lead the country through the coming uncertainty?
But thinking closer to home, how is Brexit likely to affect the hospitality industry?
it really is hard to see at this stage, but there could be opportunities as well as threats. Will the Government now slash EU legislation and red tape? Probs not, in the short term at least. All EU legislation is also ratified into UK law and as such is currently on the UK statute books as UK law. Radical changes to food safety are unlikely to be a government priority with so much else going on at the moment. There is also limited desire for changes from industry at the moment. As Dr Lisa Ackerley of the British Hospitality Association stated recently, “We still have the legislation – as it is, it’s enshrined in British legislation – so we can’t just say, “Oh we’re not going to be in the EU so let’s just abandon it”.
Have we managed to sidestep any unfortunate legislation?
We just might have. Recently certain EU nations were pushing for the banning of ‘Quats’ (quaternary ammonia) and certain Hydro chlorates for use with food. One of the big fights we were expecting at EU level over the next few years was this ban of core cleaning products which would make it extremely difficult to clean effectively. We would hope that the Quats ban will not now be imposed on UK catering businesses. It is however, likely to apply to food businesses exporting to the EU.
Will food prices go up?
Probably, in the short term at least. If the pound remains at a lower level than pre-Brexit, it will cost more to import food. This is likely to be exacerbated by higher fuel prices which will probably affect domestic food prices. We would expect that in the short term at least, food prices are likely to increase if the pound’s value remains lower. In addition, a good deal of seasonal farm labourer work is carried out by EU workers. It’s still unclear whether this will continue and, if it doesn’t, certain food prices may increase.
It is hard to predict what might happen in the medium-term regarding tariffs on food imports as this will depend on the results of the Brexit negotiations. But this may be an issue further down the line. Equally, we may have agreed favourable trade deals with non-EU countries which mitigate or even offer better value than our current arrangements.
Possibly. It may be more of a technical recession (a couple of quarters of negative growth and then a bounce back) or it may be deeper seated. If that’s the case the next few years may be more of a struggle. Another recession could affect customer attendances and onsite spending at events. Equally though, it could lead to more people holidaying in the UK at festivals and events, so we may see an increase. Street food experienced unprecedented growth during the last recession. As a result of the combination of quality food and lower price points than restaurants, street food may ride out the recession as it did the last. What about migrant labour? There is a strong chance that EU citizens may struggle to get access to the UK labour market which may cause problems for some members.
And inspection charging?
It seems from the recent Food Standards Agency review that charging may be back on the cards for UK food businesses, but we would expect this to be for re-inspections rather than periodical inspections
Credit to NCASS