Will Brexit Food Shortages Mean Higher Produce Prices For Consumers?

Both COVID and Brexit have been blamed for the apparent food shortages and lack of HGV drivers – which has hugely damaged the supply chain process in the UK, The Big Issue has published.


Eleven gold star stickers sit on royal blue leather look backdrop in the shape of a circle. The stars reflect the EU flag, however the circle is incomplete as one star appears to be missing in a nod to the UK leaving the European Union..

Some of the biggest and most well-known hospitality chains in the UK have been affected by the food shortages, including KFC, Nando’s, McDonald’s, Greggs, Subway and Costa Coffee, as well as supermarkets including Tesco, Asda, Co-op and Sainsbury’s. Unfortunately, the struggles are likely to stop with businesses, and as food shortages continue, prices are set to increase, and consumers are likely to begin feeling the pinch.


One of the biggest contributors to the food shortages and hospitality closures or menu reductions in the UK is due to a lack of drivers. There’s now a shortage of more than 100,000 drivers in the UK, a sixth of the pre-pandemic total, as estimated by a Road Haulage Association member survey. This included tens of thousands of drivers from EU member states who were, at the time, living and working in UK.


What's being done to combat the driver shortage?


So, what’s changing to combat the HGV driver shortage?


Richard Burnett, Chief Executive at the RHA, said that the government’s announcement that funding for C+E apprenticeships would increase to £7,000 from July 1st was a step in the right direction, and a positive move towards resolving the shortfall. However he noted that ‘much more needs to be done,’ taking into account that only 1.2% of all UK commercial vehicle drivers are female, according to figures from trade body, Logistics UK.


The shortage of drivers, as it stands, is affecting the livelihood of families relying of food banks and charities, with FareShare, the UK’s biggest food-bank network, reporting a loss of approximately 30% of the food it normally receives each day. Chief Executive of FareShare, Lindsay Boswell, said that the shortage is ‘putting the charity at risk of not reaching the vulnerable people they support.’


How are companies being affected by the driver shortage?


In addition to worries for consumers, retail stores including The Entertainer and Iceland have raised concerns around prices rising, and the possibility of Christmas being disrupted. This is due to the expected rise in living costs as a result of COVID-19 and Brexit, with many businesses facing the reality of having to rise prices even further to meet demand for the festive season.


In August, retail data showed a 0.4% month-on-month increase, with a 0.6% rise in non-food goods, confirming the potential need for further increases as we get closer to Christmas.


Head of Retail and Consumer Insights at Kantar, Fraser McKevitt said:


“For much of 2021, shoppers have been shielded from price increases, with more being sold on promotion this year compared to 2020. But in the past month, only 27.5% of spending was done on deals. Other than the early days of lockdown last year, that’s the lowest level recorded in the 15 years spent tracking this data” (The Guardian, 2021)

The festive season, more so than any other time of year, causes stress around finances for many – which won’t be dampened as prices rise and consumers are forced to approach the festive season much more frugally.


What about consumers?


Those benefitting from the current weekly Universal Credit uplift of £20 are likely to be anticipating struggles when the uplift is taken away in October, along with the 16% of parents with a household income of below £20,000 who claimed to have used food banks as a result of mounting childcare costs.


Bridget Phillipson, Shadow Chief Secretary to the Treasury, said that ‘figures showed that families would be hit hard by the government’s plan to cut Universal Credit and raise National Insurance contributions,’ and that ‘people are already feeling the effects of inflation, in their weekly shop and at the petrol pump.’


Interestingly, this time last year, the infamous ‘eat out to help out’ discount scheme offered by a wide range of hospitality businesses, was introduced – which explains the significant increase in consumers goods this year, as inflation is measured on a yearly basis. This also explains the large increase in UK inflation as it jumped to 3.2% in August from 2% in July – the highest rate since March 2012.


What now?


Both Brexit and the COVID-19 pandemic have had a huge knock-on effect on the ways in which the country deals with food shortages and supply chain issues.


Naturally, a change in the way the country is dealing with overseas trade was expected to have affected both the prices of and access to produce. Unfortunately, this means that many are suffering, with lower-paid workers and single-parent families being two of the groups that will likely face the reality of relying on food banks, cutting down on luxury produce items, and being worse off due to higher expenses put towards food.


As we move into the winter months, other factors affecting the finances of low-income families will equally, influence the daily lives of those struggling, with the Universal Credit uplift of £20 soon to be scrapped, rising energy bills, and colder weather requiring a greater need for increases in the volume of weekly food intake and heating usage.


 

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