French win post-brexit UK border contract

British operator Wincanton ‘extremely disappointed’ as European rival Sodexo wins deal with HMRC

A French company has won the contract for post-brexit border checks, in a blow to hopes that domestic businesses would be prioritised in public procurement. The outsourcer Sodexo has been selected by HMRC in favour of London-listed Wincanton to run Inland Border Facilities. Wincanton, the warehouse operator, told investors it was “extremely disappointed”. Its shares fell by nearly a quarter, wiping more than £100million from its value.

A FRENCH company has won the contract for post-brexit border checks, in a blow to hopes that domestic businesses would be prioritised in public procurement.

The outsourcer Sodexo has been selected in favour of London-listed Wincanton to run Inland Border Facilities by HM Revenue & Customs, The Daily Telegraph can reveal.

Wincanton, the warehouse operator and haulier, told investors it was “extremely disappointed” at the decision. Its shares fell by nearly a quarter, wiping more than £100m from the company’s stock market valuation. It was reported that the original Inland Border Facilities contract was worth £71m to Wincanton.

The company said: “The contract will be transferred by June 2023. Wincanton is extremely disappointed to lose this business after a well-executed implementation delivered in exceptionally shortened timescales and acknowledged strong performance over the past two years.”

The decision echoes the award of the post-brexit contract to make UK passports to the Franco-dutch company Gemalto in 2018.

The previous holder of the contract, London-listed De La Rue, suffered a heavy blow to its share price from which it has never recovered.

City sources said the new border checks contract has been expanded to include a “wider array of services” beyond standard warehousing for which Wincanton is best known.

Sodexo, with a market value of nearly €13bn (£12bn), dwarfs Wincanton’s £300m capitalisation. It has branched out into wider outsourcing and facilities management contracts.

The decision to select Sodexo was also surprising because the French company is best known for delivering catering services to offices, universities and sports venues. It is Europe’s second largest business of its type behind FTSE 100 firm Compass. Alex Paterson, an analyst at stock broker Peel Hunt, said: “The retendering process did not take account of the quality of this work and was decided on price instead, where the group was undercut by an international operator.”

The decision to turn to Sodexo is likely to anger proponents of domestic procurement. In a paper on the benefits of Brexit, the Trades Union Congress complained that World Trade Organisation and European Union rules “are designed to prohibit the allocation of state resources that provide advantage to domestic enterprises”.

The paper added: “However, within these rules, governments can deploy their resources to provide strategic support to their economies. Public procurement could support growth of local jobs and businesses to support economic growth.”

Eight Inland Border Facilities were set up across England and Wales to provide customs and transit checks following Britain’s exit from the EU. Ranging from Ashford and Dover on the south coast to Warrington, Birmingham and Holyhead, hauliers can complete customs arrangements for inbound and outbound trade at the facilities before beginning their journeys.

HM Revenue and Customs is responsible for outsourcing the checks alongside the Department for Transport and the Department for Environment, Food & Rural Affairs. Wincanton was selected to run the sites.

Sodexo employs 412,000 people across 56 countries. Other divisions include benefits and rewards, and personal and home care such as nursing for the elderly.

The company remains best known for its catering, however. In 2013, Sodexo was forced to withdraw all frozen beef products from the UK. As a supplier to schools and the Armed Forces, Sodexo was hit by a political backlash after products tested positive for horse DNA.

Sodexo last night declined to comment on the Inland Border Facilities contract. A spokesman for HMRC said: “The procurement process is still ongoing and will be announced through a Contract Award Notice once complete.”