Hoarding firms fill Britain’s warehouses
Global companies are stockpiling so many parts, ingredients, drugs and other goods ahead of Britain’s planned exit from the European Union next year that storage space in Britain is running out.
Pfizer, Airbus and cigarette maker Imperial Brands are among a raft of businesses stocking up to secure supplies ahead of a March separation date. Their concern is that Britain might exit the EU without agreements in place to minimise disruption at the border.
British members of the House of Commons are set to vote next week on a plan that could allay these fears, but the proposal has been criticised across the political spectrum and isn’t expected to gain parliament’s approval. That would likely lead to more talks between Britain and the EU, including the spectre of a “no-deal” Brexit in which the UK essentially crashes out of the free-trade bloc, threatening to slow, or even halt, the flow of goods that move across the English Channel.
Businesses and logistics firms say contingency planning for that worst-case scenario has stepped up in recent months as politicians haggle. With so many companies hoarding supplies, there are reports of shortages in warehouse space in some areas.
“We are turning businesses away every day, every single day,” Ken Rattenbury, chief executive of Wild Water, a Cardiff-based cold-storage company, said. “Everybody is looking to stockpile. Customers are worried about raw ingredients, flour, meat produce — everything you can think of.”
Wild Water facilities have been fully booked for five months and the company is investing in extra space to help meet demand.
Airbus, which makes the wings for its airliners in Britain, has been asking suppliers to stockpile parts to protect it against production disruptions from Brexit. The European aerospace giant has said its planning right now is based on a “no-deal” outcome. “In a week’s time, hopefully, we will know more but even then, there are still uncertainties,” chief executive Tom Enders said this week.
“We may certainly not have contingency plans for everything,” he said. “But I’m quite confident. If a withdrawal agreement comes through, we are well prepared.”
Food companies are especially vulnerable to disruption at the border since many perishable ingredients and finished products need to be kept cold or frozen, and fewer warehouses suit that purpose.
“Frozen and chilled (facilities) are for all practical purposes booked out at the moment,” Ian Wright, chief executive of the Food and Drink Federation, told MPs at a recent hearing.
He said members of the trade association had difficulty finding space and that what was available was often in the wrong part of the country.
Charlie Pool, chief executive of Stowga, a warehouse-renting platform similar to travel site booking.com, said rates at storage facilities had risen about 10 per cent since September as contingency planning kicked in.
Big warehouse owners such as supermarkets — which typically use Stowga to rent out their spare storage capacity — in October removed from the market about 600,000 pallets of space, equivalent to 12 football fields. Half that was for cold storage.
A shortage of cold storage is a challenge for the pharmaceutical industry, which needs to refrigerate a lot of medicine.
“At the moment, we’re probably near capacity on refrigeration,” Pinder Sahota, general manager for the British operations of Novo Nordisk, told MPs at a recent hearing. The Danish insulin maker has doubled its stock in the country.
Director of food and sustainability at the British Retail Consortium, Andrew Opie, said Brexit was slated for a particularly bad time of year — when Britain is especially reliant on imports of fresh but perishable produce.
Strawberries from Spain, for instance, might have a shelf life of just four days.
“There is a limit to how much you can stockpile,” Mr Opie said.
Airbus is stockpiling parts for its wing factory in Britain