Brexit and veg
Updated: Mar 3
Brexit is just one of those topics that no one really wants to talk about. A real mood-killer, but it has to be done. There are going to be a lot of differences in society but also food supplies due to Brexit.
Initially it is expected that prices will probably go up because the value of the pound will decrease. This pushes the prices on imports in the short-term. On the other hand, Brexit might also be good news for inflation in the long term as Britain will be able to shop world markets on various goods that are easier to price outside and inevitably the costs will go down (BBC News, 2019). If products are not incorporating EU tariffs, the prices could go down consequently.
However, Brexit could also mean higher prices and more inflation as an effect of the exchange rate. It is highly likely that we see the exchange rate go down pushing the cost of everything up, longer term it depends on the how the economy reacts and how competitive the economy will be in the future. It could result in more jobs and higher wages or, if the economy fails it could lead to the opposite.
Most economic experts state commerce and the economy will carry at a 2% inflation rate, but this could vary drastically depending on the deal (The Independent, 2019). This will have an immediate impact on British families as the living standard will be squeezed along with import prices going up. If the national living wage does increase, the Bank of England will raise the interest rates, mortgages and loan repayments in order to constrain the 2% inflation and level out the playing field.
The impact of this on fruit and vegetables is that we will have to pay more to receive our goods. There will be more scrutiny around what products are coming in and out of UK. Although the UK grows a lot of its own fruit and vegetables resulting in cheaper prices due to no transport fees it has to be considered is that there is a unreliability of weather conditions and some for some product lines it is simply not possible to farm in our climate. This causes us to outsource to neighbouring countries such as Spain who have been supplying items such as Onions and Lemons to the UK for many years.
Some of the local market suppliers are already saying they will no longer be able to supply bulkier goods such as onions, as due to the increased cost of import from the EU it will no longer be profitable for them to fill transit with lower margin items which take up considerably more space. Instead they may only decide to import smaller higher value produce to maximize the return on the cost of importing them.
There is a possibility that Britain will face shortages and experience difficulty supplying food in the short term due to these import costs increasing and the pound exchange rate lowering. Most supermarkets have begun to prepare for this change of events. The Co-op chief executive, Steve Murrells, is particularly worried about fruit because he expects prices to increase significantly. Murrells said the convenience chain was attempting to mitigate the potential impact by stockpiling long-life products such as water, toilet paper and canned goods but was struggling to manage logistics for fruit such as blueberries, apples and pears, which are imported during the British winter (The Guardian, 2019).
At Bill Bean our focus has always been on English, local and seasonal produce so we intend to continue to incorporate as many British lines as seasonally possible. We have great partnerships with our UK farms and growers, and we expect to see our trade with them increase further. We have also worked with two of the largest importer/exporters in France and Holland for many years. When English seasons draw to a close, we will most like increase the quantities of produce we import directly to avoid paying increased brokerage fees and secure the best possible prices for any imported goods.
There may we troubling times ahead, but we feel that by planning smart menus or utilizing alternative options increased costs can be mitigated until the economy adjusts. For more information please get in touch, we also recommend downloading our app and following us on Instagram to get the latest updates and special offers.
https://www.bbc.co.uk/news/business-49563407 (BBC News, 2019)