Sainsbury’s chief warns of Brexit disruptions to fresh food supply chains
PUBLISHED: 08:37 04 September 2017 | UPDATED: 08:37 04 September 2017
The chief executive of Sainsbury’s has warned fresh food could be left rotting at the British border if strict customs controls for EU goods are put in place after Brexit.
In a direct intervention into the Brexit debate, Mike Coupe said that anything disrupting established food supply chains, currently governed by EU customs arrangements, would be “detrimental”.
He added that the retail sector will make its voice heard “strongly” if pragmatism does not prevail during exit negotiations.
“The UK sources roughly a third of its food from the European Union and food is by far and away the UK’s largest export,” he said.
“If you take our fresh produce supply chains, for example, we put things on a lorry in Spain and it will arrive in a distribution centre somewhere in England, and it won’t have gone through any border checks.
“Anything that encumbers that has two effects: it adds cost, and it also has a detrimental effect on freshness - if you’re shipping fresh produce from a long distance, even a few hours of delay can make a material impact.”
The warning comes after the British Retail Consortium said last week that food prices, already soaring following the Brexit-induced collapse in the pound, could rocket further unless measures to tackle red tape and improve ports are put in place before Britain exits the bloc in March 2019.
Mr Coupe said that the repercussions of supply chain disruption are “not fully recognised” in Westminster.
He cautioned that if it gets nearer to March 2019 and a solution has not been found, retailers and food producers will “make that point and make it very strongly”.
His comments come following another week of embarrassment for Theresa May’s government in Brussels, where Brexit secretary David Davis pleaded with the EU to begin trade talks, despite having earlier agreed to phased negotiations.
In a sign that businesses are becoming more vocal about the risks Brexit poses, the Aston Martin boss has also recently expressed alarm at the prospect of “cars being stuck at a French port for six months” following Britain’s withdrawal .
On shop price inflation, Mr Coupe said that while more pain was likely on the way for consumers, the market was not experiencing the “mother of all meltdowns” it saw during the financial crisis.
He said: “The lines have already crossed between inflation and income.
“We’re not in the mother of all meltdowns that we saw in 2008/09, where literally in two or three months we saw consumer spending drop off a cliff.
“But you would be naive if you’re saying it’s all going to be a bed of roses for the next year to 18 months because there is a squeeze on consumer incomes coming down the track.”
Mr Coupe pledged to reduce costs and work with suppliers to mitigate inflation, and also reduce overheads.
Sainsbury’s has committed to slashing £150m of costs this year and £500m in the following three years.
Speculation has been rife that the firm is preparing to follow Tesco in axing hundreds of head office jobs in the process, but Mr Coupe insisted that staff will be the first to know of any cuts.