The U.K. spends billions, stockpiles for chaotic Brexit that may never happen

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April 6, 2019, 7:34 AM GMT / Updated April 6, 2019, 10:01 AM GMT / Source: NBC News

By Patrick Smith

LONDON — In the spare bedroom of Sarah Cuffe’s house are piles of food and toiletries. Natural disasters don’t hit the English county of Hertfordshire very often but it looks like she’s ready for one.

“Just in case the worst comes to the worst, we thought we’ve got a spare bedroom, so why not stockpile stuff like pasta, tinned tomatoes [British for canned tomatoes], things aren’t going to go off,” she told NBC News. “We’ve got loo roll [British slang for toilet paper], cleaning products, multivitamins and nuts for protein.”

But the mother of two isn’t getting ready for a hurricane. Instead, she is one of the many Britons stockpiling goods in case of the most chaotic and unpredictable Brexit outcome: The United Kingdom leaving the European Union without a negotiated withdrawal agreement.

A “no-deal” Brexit — which is scheduled to happen on Friday if 27 E.U. leaders don’t this week unanimously agree to delay the process further — would leave the U.K. floundering without any international trade agreements, potentially causing huge delays to imports and exports of commodities, consumer items and medical supplies.

If the supermarket shelves end up bare as a result, Cuffe says her stockpiled food can keep her family going for about a week.

Some hard-line Brexit supporters, including members of Prime Minister Theresa May’s Cabinet, think the threat of leaving without a divorce agreement is overblown. But that hasn’t stopped the government from setting aside £4.2 billion pounds ($5.5 billion) to spend on preparing for the worst.

Lord Kerslake, a former head of the civil service who is not known for exaggerating, this week said that the Brexit crisis represents the country’s biggest peacetime emergency.

So just how ready is the U.K. for a “no-deal” clean break?

Food fight

The U.K.’s food supply chain is a delicate balance of transport and storage — the trick is to only hold as much stock as you’re going to immediately sell, so much of it arrives just in time to be sold. Many in the industry fear big shortages in the event of a “no-deal” Brexit. No deal will inevitably mean more customs checks and more delays at the border. More delays mean more empty shelves.

The U.K. only makes about half the food it consumes, with some 30 percent coming from the E.U. The country particularly relies on European producers for soft fruit and vegetables — up to 90 percent of lettuce on sale in British shops is from the E.U. depending on the season.

The British capital’s largest cold storage facility has been full for most of the last 18 months, as retailers and transport firms prepare for the worst.

“Mainly in our industry, there tends to be a big increase in demand in the summer and in the run-up to Christmas,” said Danisha Jagatia, commercial manager for Transkold, which operates the site in the Stanmore area of north London. “However, with all the uncertainty with Brexit, we have found that a lot of our existing customers have been bulk-ordering from Europe in the last few months. We’ve had to increase our staff levels.”

Transkold has space for 2,000 pallets of fruit, vegetables, baked goods, ingredients and other items, which have to be stored at 7 degrees below zero. It has no more space to offer major retailers and supermarket chains looking to stockpile ahead of Brexit.

Jagatia admitted this was “a good problem to have” but added the company regretted having to turn new business away.

The demand isn’t all coming from the U.K. — E.U. transport firms which regularly bring goods across the English Channel are asking for increased storage too.

And then there are luxury goods. Fortnum & Mason, the high-end department store in London’s West End, has been stockpiling hundreds of thousands of bottles of Champagne.

The retailer has a contract to provide gallons of the stuff to the Chelsea Flower Show in May — and while the store sources 86 percent of its products from the U.K., Champagne can only be made in a single region of France.

A truck is driven past dozens of others parked after traveling by ferry from France to Dover, England.Toby Melville / Reuters file

“Just in case there were significant delays at ports as a result of Brexit, that we ought to increase our cover by about an extra month’s supply, so didn’t sell out,” Fortnum & Mason CEO Ewan Venters told TalkRadio on Thursday. “The Holy Grail of retailing is you don’t want to hold more stock than you need to — but given the high-profile nature of that event, we genuinely thought it would be important to hold a few more weeks’ stock just in case.”

The list goes on. A British chocolate maker has spent £150,000 stockpiling Brazil nuts and ginger, while a bed maker has spent £250,000 on extra materials — just in case.

Medical concerns

Somewhere in a warehouse in Belgium, there are thousands upon thousands of packages of drugs and medical supplies waiting to be shipped to the U.K. in the event of a “no-deal” Brexit. The government has established new shipping routes and commercial contracts just for this purpose, at a cost of £88.8 million ($115.6 million) over six months. More urgent deliveries will go by plane.

April 5, 201901:07

This “logistics hub” is just one part of the government’s intricate and expensive attempt to prevent disruption to patients’ lives. Some medicines, such as insulin, are not made in the U.K. and the country squarely relies on its frictionless trade with the E.U. for its supply.

Prime Minister May is a type 1 diabetic.

The Department of Health and Social care has said it is confident normal service will resume, but has pointedly refused to give any guarantees.

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