Food and drink prices are set to soar in the months to come as a result of Brexit, bosses have warned ministers.
In emergency talks called this week by business minister Sajid Javid, the leaders of the FDF and the BRC, among others such as the CBI, called for urgent government intervention to mitigate the economic and regulatory chaos threatening to engulf the industry.
They told The Grocer they were still “in a state of shock” at the result but also deeply concerned by the apparent lack of a government strategy to cope with the fallout.
Politicians at the event - also including small business minister Anna Soubry and economic secretary to the Treasury Harriett Baldwin, as well as trade minister Mark Price (until recently boss of Waitrose) - were said to have “sat mostly in stony silence” as business leaders warned of the threats facing the industry.
“There was very little coming back in the way of answers,” said a BRC spokesman. “Our message was that with every day that passes without a concrete government strategy, the damage caused by uncertainty is growing, The sad fact is that on so many key issues we simply have no idea what the government plans to do.”
The consortium warned that after an unprecedented period of deflation, food and drink prices looked set to rise as a result of the fall in the value of the pound.
The spokesman compared the impact of Brexit to that of an earthquake: “We are already seeing an impact through devaluation of the pound,” said the spokesman. “There are potentially two stages to this. It’s possible the markets may calm down a bit after the initial shock, but then another shock hits after Article 50 is finally activated and we could rollercoaster again.
“One of the key fears we raised with the ministers is how the uncertainty feeds through into increased prices. Because of the uncertainty in the market, and the pound losing value, at some point you can’t prevent prices going up.”
“Yes, there are factors that continue to be deflationary, such as the discounters and competition on price, but this is something that impacts on all retailers not just supermarkets. There comes a point when the deflationary pressures will be outweighed.”
Founder of gluten-free bakery Artisan Bread Organic Indgrid Eissfeldt said she was devastated by the vote and that rising costs could force her to quit the UK.
“It’s a nightmare. I went into panic mode. I was bawling my eyes out. It’s the end of an era. We are the only organic gluten-free bakery in the UK and we import all our ingredients. Not because we want to but because we have to. The prices of raw ingredients haven’t gone up because I pay in euros but I don’t dare look at the exchange rate for the pound.”
“Especially with other factor such as the oil price, and other huge factors like business rates, the apprentice levy and the national minimum wage. They were coming already. Now this has hit us out of the blue.”
FDF director general Ian Wright, who was also at the meeting, said the UK economy faced going on a “big dipper ride” and warned it was inevitable prices would rise as a result of the impact on commodity prices.
“If you are an ingredients supplier then in the past week you would have seen your ingredients become more expensive and we’re going to face increased import costs across the industry. This may not feed into prices in a week or a month, but it will come,” he added.
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