Brexit will ‘damage UK food manufacturing’: survey

Worries about a Brexit were widespread among respondents, with a number raising particular concerns.

“If a Brexit comes about, our business will definitely suffer as a large number of our overseas customers and agents have already told us they are looking elsewhere for our products in case they need to go elsewhere,” warned one ambient foods and general groceries business development manager.

“Some have already found cheaper / better products, so we are likely to lose more / most of our export business in the event of a Brexit.”

But, this respondent was not alone, and a number of others expressed similar concerns. Some remarked that the uncertainty was hitting capital investment plans.

“Brexit uncertainty is a major concern,” reported a food packaging equipment supplier.

“Investment plans are being put temporarily on hold until outcome of the referendum.”

‘Scare tactics’

However, not everyone was behind remaining in the EU, with some respondents critical of the “scare tactics” of the ‘vote remain’ campaign.

“The biggest problem for us are all the scare tactics by Messrs Cameron & Co for the ‘In Campaign’,” remarked one wholesaler.

“We pay in the most and it would appear we get the least out. It is a club for Germany and France only. If we receive a multi-million pound order from outside the EU, why do we have to ask permission to supply? It is not a level playing field!”

FoodManufacture.co.uk’s annual online survey gathered responses from industry professionals during May 2016 on a range of topics. These included market conditions, Brexit, trading relationships, environmental management, investment and employment, the Apprenticeship Levy, the National Living Wage and product development from industry professionals. The full results will be published in the July issue of Food Manufacture magazine.

While some respondents expressed negative comments about staying in the EU, this view was in the minority and most claimed a vote to leave would be damaging.

“It continues to be a worrying time for small business owners like myself, but I am keeping a positive view on the future,” said a condiments manufacturer.

Elsewhere, the comments from a food packaging materials supplier expressed the views of many: “The uncertainty and lack of clarity around potential Brexit are cause for concern.”

Rising ingredients costs

A quality assurance manager in the health foods sector warned of the rising costs of imported ingredients as well as the damage done to exporters: “If we leave the EU it will be a terrible effect on food manufacturers in this country.”

The problems of deteriorating exchange rates following Brexit were cited as a potential problem by an importer of frozen foods. However, another importer of ingredients, while echoing the problem of fluctuating exchange rates, was more sanguine about the prospects for life after Brexit.

“We grow our business year on year and expect this to continue in the future,” he said. “Exchange rates give us the most challenges, however, we are practised at managing the impact of this and so, in or out, we do not see major issues ahead.”

A quality manager at a chicken processor predicted that food prices would rise if the UK left the EU. “Brexit, whether people like it or not, will increase cost – prices will have to increase. People have got far too used to food being too cheap.”

However, some respondents were critical of restrictive EU legislation. One regulatory affairs expert with a bakery manufacturer argued that some EU rules inhibited innovation.

In particular, he cited the restrictions on the use of high intensity sweeteners in baked goods. He also criticised the need to link sugar-reduction claims to associated energy/calorie-reductions which, he argued, was difficult to achieve in bakery products.

“This removes any incentive for manufacturers to reduce sugar if they cannot make a claim on pack,” he said.

Meanwhile, don't miss our exclusive guest article, setting out the case for quitting the EU, from leading Brexit campaigner and former environment secretary Owen Paterson.