BREXIT AND THE FOOD AND DRINK INDUSTRY: THE IMPACT ON THE SUPPLY CHAIN AND THE COMMUNICATIONS CHALLENGE

2 weeks ago

It is beginning to sound like a cliché already, but Brexit will provoke tectonic changes for Britain affecting our economy, politics, diplomacy, society and culture. It will shift our position in the world, changing the way we perceive ourselves and how others view us. 

Clearly for British business this presents many challenges, but also opportunities. These come with communications challenges and this was the focus of a breakfast roundtable discussion we hosted with Tim Rycroft, Corporate Affairs Director of the Food and Drink Federation, at Good Relations last week.

As negotiations proceed slowly, the complexity becomes more apparent. There are many balls in the air right now:

·        Negotiations or debates around the divorce agreement

·        Discussions on a proposed transition agreement

·        Future trade relationship negotiations (with the EU as well as other markets)

·        Legislative processes (involving at least 15 Bills which will need Royal Assent in the next year)

·        Contingency planning in case it all goes wrong…

Because Brexit progress seems so intractable, this historic milestone has been relegated by many to ‘boring’ status. As Tim set out in his roundtable opening, his recent visits to food and drink businesses across the UK suggested many regard Brexit as a spectator sport rather than something that they can inform or influence.

Politics aside, Tim explained that Brexit has the potential to be a technical crisis for the food and drink sector. For example, if customs arrangements are not agreed, perishable goods risk being delayed at borders. Similarly, if labour and immigration arrangements are not agreed, lorries risk further delays at ports while visas of non-British nationals are checked.

It is not clear at this stage that ports will have the facilities to process customs and immigrations checks and if not, will firms have to redirect their imports or exports via other ports with the knock costs and supply chain issues this implies? If firms cannot meet fulfil contracts, are there viable contingencies?

Of course, every crisis presents risk and opportunity. But smaller firms are less able to absorb increased costs and may inevitably suffer the most due to their comparative disadvantage. Tim argued that the absence of the voice of business is the principle reason why many technical aspects of Brexit are not being treated with urgency. 

Brexit is highly politicised. Understandably, firms do not want to get stuck in the middle of what remains a highly contentious debate. But all firms, not just those in the food and drink industry, need to be clear on the business challenges ahead and get on the front foot with communications to maintain confidence amongst their stakeholders, from customers and shareholders through to suppliers and employees.

Adopting a proactive, positive approach to communications can strengthen reputation and even provide a source of differentiation in competitive markets, where customers will be looking for evidence that can underpin confidence in the relationships they rely on.

James Hawkins, Senior Consultant, Public Affairs