Source: Alamy

Industry agrees a no-deal is more likely under Johnson

Senior industry sources have said this week the chances of the UK leaving the EU without a deal have increased with Boris Johnson as prime minister - but it’s not clear whether his ramping up of no-deal rhetoric will translate into increased Brexit planning by businesses.

This week the government announced a new £2.1bn investment in no-deal planning to be spent on medicines, extra border officials and a public awareness campaign looking at what disruption to expect.

Pauline Bastidon, head of European and global policy at the Freight Transport Association, said the chance of a no-deal increased the moment Johnson and Jeremy Hunt became the final two in the race for the leadership of the Conservative Party.

“We have been advising our members to prepare for this outcome for a year now,” said Bastidon. “But we are now really seeing which way the signs are pointing and they are all pointing at no-deal.”

She added, however, companies’ responses were likely to vary. Those companies that didn’t invest in no-deal planning ahead of the original Brexit deadline in March might be prepared to gamble again, she said. But those that incurred what turned out to be unnecessary costs may be reluctant to get their fingers burnt a second time.

Having said this, FTA retailer members were likely to either double or treble the number of customs experts they employ in the run-up to 31 October, Bastidon said. As revealed by The Grocer this week, Lidl is already looking to strengthen its customs team (see below).

A supply chain director at a delivered wholesaler added a no-deal or second EU referendum were both more likely than leaving with a deal. “We are planning for a worst-case scenario, and that is a no-deal,” he said.

Another wholesale boss said he would look to increase his company’s stock from its regular position of holding three weeks’ worth to four, adding there was little else he could do.

He did, however, back the PM’s no-deal stance, arguing it was the best way to try to secure a deal with the EU.

In terms of storage capacity, Shane Brennan, chief executive of the Cold Chain Federation, said “the frozen food storage sector has been operating at full pretty much consistently since September 2018”.