No-Deal Brexit Fears Raises Demand For Food Warehouse Space Resulting In Shortage

The rush to stockpile products because of growing concerns over a possible no-deal Brexit among retailers and manufacturers in the UK is causing a shortage of food warehousing space.

According to media reports quoting industry representatives, there is virtually no free space available for the next six months for warehouses that can store frozen and chilled food which includes a wide range of products from garden peas to half-cooked supermarket bread and cold-store potatoes. Many space seekers are being refused.

“I started getting inquiries two to three months ago, but they reached fever pitch in the last 48 hours,” Malcolm Johnstone, owner of Associated Cold Stores & Transport (ACST) was quoted in a media report last week. “There has been a sea change since Wednesday.”

Food manufacturers and suppliers are getting concerned about finding out ways to secure stockpiling of their products, says Johnstone whose warehousing facility has a total capacity to store 80,000 pallets in cold storage up and down the country,

Apart from retailers and dealers in frozen foods such as peas and pizzas, bookings are also being rushed for by food manufacturers such as crisp-makers because they want to ensure a steady supply of potatoes which they typically store in cold storage.

Stores and warehouses are also being sought out by overseas suppliers.

“I had a call the other week from a man from a Danish butter company who wanted to store 11,000 pallets of butter in the UK. We had to turn him away,” Johnstone told the media.

“Normally butter would dribble into the UK food chain to meet demand, but these people are worried the supply chain will be interrupted and want stocks in the market before 29 March,” he said.

Retailers were pressing ahead with contingency planning because it was prudent to do so, said Ian Wright, the chief executive of the Food and Drink Federation.

“All the arithmetic seems to suggest that it will be impossible for the prime minister to get her deal through, so retailers and food manufacturers are continuing with contingency plans,” he said.

Typically the demand is least for temperature-controlled warehouses between the period Christmas and Easter every year. This time however the demand is at its peak at this lowest point because of concerns over the possibility of a no-deal Brexit. According to the Food Storage and Distribution Federation (FSDF), this trend denotes that the trends in the earlier years have been reversed. FSDF represents about 350 warehouse owners who have a combined capacity of about 75 per cent of all the commercially available frozen and chilled food warehouses in the UK.

“It’s a problem, because food is manufactured or stored on a just-in-time basis, and the system isn’t built for stockpiling. But because of Brexit, every business that wants to guarantee its supply into UK shelves is looking for additional warehouse space right now,” said Shane Brennan, the chief executive of the FSDF.

“Our members are operating at full capacity for the period January to April and beyond. It would normally be the quietest time of the year. They are effectively full now. They are turning customers away,” said Brennan.

(Adapted from TheGuardian.com)

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Categories: Economy & Finance, Geopolitics, HR & Organization, Regulations & Legal, Strategy, Sustainability, Uncategorized

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