Brexit fears trig­ger a wave of hoard­ing in Bri­tain

The Globe and Mail (Prairie Edition) - - NEWS - PAUL WALDIE EUROPE COR­RE­SPON­DENT LON­DON

House­holds stock­pile food and busi­nesses fill ware­houses in case of delays at the border

A stock­pil­ing frenzy has swept across the United King­dom as busi­nesses and fam­i­lies fran­ti­cally pre­pare for the grow­ing prospect Bri­tain will crash out of the Euro­pean Union in March.

Busi­nesses have been load­ing up on spare parts and raw ma­te­ri­als amid fears there will be lengthy delays at the border and the gov­ern­ment has told drug mak­ers to stock­pile enough medicine to cover a six-month short­age. The sit­u­a­tion is so se­ri­ous that on Fri­day, Health Minister Matt Han­cock said the depart­ment was draft­ing plans to char­ter air­planes to fly in medicine and ra­tion the amount of drugs phar­ma­cies can dis­pense.

Many fam­i­lies have also started hoard­ing as much food and medicine as pos­si­ble. “I’m ac­tu­ally ter­ri­fied to be hon­est,” said Joanne El­garf, who lives in Lon­don with her hus­band and three chil­dren. She has been buy­ing ex­tra non-per­ish­able items such as pasta, cof­fee and tuna for a while and has enough sup­plies to last a month. “I’m quite wor­ried about panic in Fe­bru­ary and March and peo­ple go­ing, ‘Oh my God, this is real, this is go­ing to hap­pen,’ ” she said. Ms. El­garf is par­tic­u­larly wor­ried about ac­cess to the drugs that her four-year-old daugh­ter takes for se­vere epilepsy. She has enough to cover an ex­tra few weeks but she doesn’t know what will hap­pen if ship­ments from the EU are dis­rupted.

Ms. El­garf is among 2,500 peo­ple who have joined a group called 48 Per­cent Prep­pers, which takes its name from the 48 per cent of vot­ers who did not sup­port Brexit in the 2016 ref­er­en­dum. The group shares ideas on how to get ready for a “dis­as­trous Brexit” which could “in­volve things such as: food short­ages, rag­ing in­fla­tion, col­laps­ing pen­sion val­ues, seizure of prop­erty, in­creased crime, mass un­em­ploy­ment, col­lapse in house prices, short­age of medicine,” ac­cord­ing to the group’s Face­book page.

Prime Minister Theresa May has in­sisted that the gov­ern­ment is pre­par­ing for all even­tu­al­i­ties and says she’s con­vinced Bri­tain won’t face a hard Brexit. But her pro­posed Brexit agree­ment with the EU has run into fierce op­po­si­tion and mem­bers of Par­lia­ment are ex­pected to soundly re­ject it in a vote on Tues­day. No one knows what will hap­pen next and that’s led to mount­ing con­cern Bri­tain will leave the EU on March 29 with­out any ar­range­ments for trade or other mat­ters.

With a no-deal Brexit loom­ing, many com­pa­nies have been scram­bling to stock­pile es­sen­tial sup­plies. Rolls-Royce PLC and Air­bus have started stock­ing up on en­gine com­po­nents; Premier Foods is spend­ing £10-mil­lion ($17-mil­lion) on an in­ven­tory of in­gre­di­ents for cakes, gravy and other prod­ucts; Im­pe­rial Brands has bud­geted £30-mil­lion to pile up on cig­a­rettes; Ir­ish dairy com­pany Or­nua is build­ing a moun­tain of cheese and high-end re­tailer Fort­num & Ma­son has bought a two-month sup­ply of Cham­pagne.

“I just wouldn’t like to run short of Cham­pagne for the Chelsea Flower Show,” Fort­num chief ex­ec­u­tive Ewan Ven­ters told jour­nal­ists last week, re­fer­ring to the an­nual event that takes place in May. Over all, Bri­tish busi­nesses are ex­pected to stock­pile around £34-bil­lion worth of goods in the run-up to March 29, ac­cord­ing to the Lon­don-based Cen­tre for Eco­nomics and Busi­ness Re­search.

Most busi­ness lead­ers and economists fear a no-deal Brexit could cause chaos and short­ages be­cause Bri­tain will abruptly lose un­fet­tered ac­cess to the EU. The Bank of Eng­land has said that a dis­or­derly Brexit could shrink the econ­omy by 8 per cent within a year, drive down house prices by 30 per cent and lop 25 per cent off the value of the pound. Man­u­fac­tur­ers and re­tail­ers who rely on just-in-time de­liv­ery of sup­plies say a hard Brexit could cause crip­pling border delays, par­tic­u­larly at the Port of Dover and the Euro­tun­nel, which to­gether han­dle around 16,000 trucks a day. A de­lay of 10 to 30 min­utes at cus­toms could bank­rupt 10 per cent of Bri­tish busi­nesses that have EU sup­pli­ers, ac­cord­ing to a re­cent sur­vey of 804 com­pa­nies by the Char­tered In­sti­tute of Pro­cure­ment and Sup­ply.

Just a two-minute de­lay at the Port of Dover could cause traf­fic on the nearby M20 motorway to back up 27 kilo­me­tres and Kent County Coun­cil, which in­cludes Dover, said on Fri­day that it will have to cope with traf­fic jams in­volv­ing 10,000 ve­hi­cles. The coun­cil warned the traf­fic dis­rup­tions could be so se­ri­ous it will af­fect other ser­vices, such as garbage dis­posal, school pro­grams and mov­ing bod­ies to the morgue. There have been re­ports the gov­ern­ment is con­sid­er­ing hir­ing ships to trans­port goods across the English Chan­nel and line the M20 near Dover with hun­dreds of por­ta­ble toi­lets to pro­vide re­lief for mo­torists stuck in traf­fic.

“All of this is mas­sively dis­rup­tive and very scary,” said Ian Wright, chief ex­ec­u­tive of the Food and Drink Fed­er­a­tion, which rep­re­sents around 7,000 Bri­tish busi­nesses. “Our mem­bers are very con­cerned.” Mr. Wright said Bri­tain al­ready had a short­age of ware­house space be­cause com­pa­nies have finely tuned their sup­ply lines so much they rarely keep any­thing ex­tra on hand. Com­pa­nies “will only buy what they are in­tend­ing to use and, by and large, they’ll only make what they know they can sell,” he said.

Finding stor­age space won’t be easy. The ware­house va­cancy rate across the coun­try has sunk to around 5 per cent, the low­est on record, and in Lon­don it has dropped to 3 per cent. “Our ware­houses are quite full,” said Philip Stephen­son, chair­man of Davies Turner PLC, one of Bri­tain’s largest lo­gis­tics com­pa­nies, which op­er­ates 20 re­gional ware­hous­ing cen­tres, in­clud­ing a fa­cil­ity in Bris­tol that can hold 27,000 pal­lets. Nor­mally ware­houses empty out at this time of year as prod­ucts are shipped to stores for Christ­mas. But Mr. Stephen­son said Davies is field­ing more calls from com­pa­nies in Bri­tain and Europe look­ing for stor­age be­cause of Brexit.

“It’s just peo­ple who want to keep go­ing dur­ing the crit­i­cal days if there’s a sort of hia­tus on the 29th of March,” he said. He added that like many busi­nesses, Davies is hop­ing that some kind of Brexit deal will be struck so that a no-deal sce­nario can be avoided. “We hope there’s a good enough deal, and I don’t see why there shouldn’t be, so that the U.K., which in many ways has ad­van­tages, can con­tinue to act as a gate­way to Europe.” He laughed and added: “You Cana­di­ans are sit­ting pretty.”

I just wouldn’t like to run short of Cham­pagne for the Chelsea Flower Show. EWAN VEN­TERS CEO OF HIGH-END RE­TAILER FORT­NUM & MA­SON

JON ROW­LEY/THE GLOBE AND MAIL

Davies Turner ware­houses are usu­ally emp­ty­ing out in De­cem­ber, but this one is Bris­tol, Eng­land, was full on Fri­day, and the lo­gis­tics com­pany’s other 19 fa­cil­i­ties are fac­ing un­usu­ally high de­mand in the months lead­ing up to Brexit, com­pany ex­ec­u­tives say.

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