Brexit backed by more smaller food firms

The new research (see panel below) commissioned by William Reed, the publisher of FoodManufacture.co.uk and Food Manufacture, in conjunction with its market research arm Him!, has shown that many smaller food and drink businesses do not expect to be materially affected by a Brexit vote.

This finding will be music to the ears of the former environment secretary and ardent Brexit campaigner Owen Paterson, who will be speaking on the impact of a vote to leave the EU for regulation and innovation in UK food and farming at the Crop Protection Association’s (CPA’s) annual convention, which takes place next Thursday (May 12) in London.

Owen Paterson

Paterson will be joining Sir James Paice, another former food minister, Guy Smith, vice president of the National Farmers Union, and Professor Huw Jones, from Aberystwyth University, in a panel session chaired by Alastair Driver, political editor of Farmers Guardian, on the subject.

“Farming, more than any other sector, will be affected enormously by the outcome of June’s referendum and regulatory reform is a crucial aspect of the debate,” said CPA ceo Nick von Westenholz.

“Those urging us to remain in the EU must set out a clear path for improving the system in a reformed EU, and not simply argue that a UK outside the EU will nevertheless remain subject to the same burdensome regulations.

Von Westenholz added: “Similarly, those campaigning for Brexit need to set out the mechanism for establishing a post-EU regulatory system that will promote the competiveness and productivity of UK farmers. These issues involve important questions that farmers will want to know the answer to.”

Survey on EU membership

Of the 525 respondents to the William Reed survey (there were 561 respondents in total) to a question about their personal voting intentions, 39% planned to vote to leave. Against this finding, 37% believed leaving the EU could have disastrous consequences for their businesses and planned to vote to remain, with 21% still undecided.

While food and drink manufacturers were broadly supportive of the UK staying in the EU, with 52% convinced leaving would be bad for UK food and drink, foodservice operators – particularly small traders in the pub sector – lean towards a Brexit, with 46% planning to vote ‘out’.

This contrasts starkly with the views of the Food and Drink Federation, which came out strongly in favour of remaining in the EU (71%) following a recent survey of its food and drink manufacturing members earlier this year. It is also counter to the views of the majority of attendees at this year’s Food Manufacture Business Leaders’ Forum, held in London in January.

Among retailers and wholesalers, surveyed by Him!, the split is even, with 33% for a Brexit and 33% against from a professional point of view, though 43% plan to vote ‘leave’ in a personal capacity. However, this may reflect the fact that the numbers of responses from both the farming and retail sectors in the survey were not particularly high.

‘Security above commercial interests’

“Security comes above commercial interests, and closing our borders will go a long way to achieving this,” said one respondent when asked why they were backing Brexit despite business concerns.

“We need to make our own rules and trade deals,” added another pro-Brexit respondent.

Yet, many food and drink professionals remain deeply concerned at the potential impact of a UK exit. “If the vote is out, the changeover uncertainty will hamper investment and growth, potentially leading to stagnation for a period until new terms are established,” said one.

Most respondents (40%) warned food and drinks prices could rise outside the EU by an average of 2.4% with many citing a fluctuating exchange rate and changes to trade deals.

“The cost of goods imported by my wholesalers will probably rise, which means increasing costs for us and inflating prices to our customers,” said one retailer.

Other key areas of concern highlighted by the survey included uncertainty over employment, recruitment and trading relationships.

‘End of our business’

“An exit would be the end of our business,” said one baker. “The pound has already dropped in value at the mere thought of an exit, it will fall even more if we exit, which would make all our ingredients and packaging so expensive that we could not sell them in the UK any longer.”

Another meat supplier added: “The UK in the meat industry has had reputational issues to overcome and has been very successful post BSE. It does, however, have a long way to go still and needs the EU support. The UK is a small island versus the super leagues that are China and the US.”