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Disorderly Brexit threatens delays at ports

Boris Johnson's allies in Northern Ireland rejected his proposed Brexit deal

By Greg Ritchie

For many Britons watching the Brexit talks reaching their climax, it may come down to this: Will there be any fresh greens on the dinner table this winter?

The British vegetable growing season has ended just as the Oct. 31 deadline for leaving the European Union approaches, meaning tomatoes and lettuce on U.K. supermarket shelves have started coming from Spain or Portugal.

A disorderly exit -- still a possibility as Prime Minister Boris Johnson’s allies in Northern Ireland rejected his proposed deal -- threatens delays on crucial port routes. That means perishable produce could rot on the docks, importers fear.

“We’re dealing with fruit that is dying -- as soon as it is picked it is dying,” said Eddie Fleming, director of JEM Fruits Ltd. in Maidstone, England, which is halfway between London and the crucial port of Dover on the southeast coast.

While Brexit talks have centered around arcane matters like the “backstop” governing the border between Ireland and Northern Ireland, the U.K.’s food supply could be a more obvious casualty of any new breakdown. Britain receives about 30% of its food from EU members, with a further 10% coming from other countries covered by EU trade deals, government data show.

The U.K. food supply chain is resilient and officials have been meeting regularly with industry to ensure preparations for Brexit, a government spokesperson said in a statement.

“Consumers will continue to have access to a wide range of high quality food, whatever the circumstances,” the emailed comment said.

There is a limited window to get fresh produce from continental Europe to the U.K. before it wilts and won’t sell. This underscores the importance of getting a deal through that will keep trucks moving across borders -- especially the busy ferry route from Dover to Calais, France -- and preserve the delicate logistics that ensure Britons enjoy fresh tomatoes, berries and other perishables year-round.

As many as 85% of trucks attempting to cross the Dover-Calais straits might not have the paperwork needed to get past French customs on the day after a no-deal exit, according to an estimate the government published last month. Disruption at ports would probably continue as haulers adapt slowly, with the flow of traffic only improving to 50-70% of the current rate after three months.

During the British growing season, the Lea Valley in southern England is often described as “London’s Salad Bowl.” About 500 million cucumbers and sweet peppers are grown there every year, along with tomatoes, lettuce and eggplant. At this time of year, many local growers switch production to their European nurseries. Any delays in this journey to the U.K. would impact the freshness and quality of produce in stores, according to Lee Stiles, secretary of the Lea Valley Growers Association.

It typically takes four days to get produce from nurseries in southern Spain to the processing center in the Lea Valley, where it is graded, packed and moved to supermarket depots the next day. It may then take a further day to be distributed to stores around the country. Alternative methods of transport such as air freight could add significantly to supplier costs.

There is “simply no room” for growers to shoulder the cost of additional tariffs or transport costs, Stiles said, noting that profit margins in the fresh produce industry have been squeezed following years of supermarket price wars. That means either higher prices for the consumer or shortages because the economic incentives to import will disappear.

Farmers also worry about whether they’ll have enough workers to pick crops after the British growing season resumes, Stiles said. More than 90% of the current workforce in the Lea Valley hails from Europe, and Stiles said his members have already seen a decline in job applications in the last two years due to Brexit unease.

Haulage companies have also demanded higher premiums since the EU referendum in anticipation of increased paperwork and delays when driving produce to the U.K., according to Fleming from JEM Fruits.

“They’re worried about getting out of the country as well as in,” said Fleming, citing a 15% increase in haulage costs from countries like the Netherlands and Germany. “They’re quite specific that it’s because of Brexit.”

Fleming fears he can’t pass on the extra cost by demanding lower prices from the European growers he works with because buyers from markets like China will offer better deals. Meanwhile, the U.K. supermarkets that buy the fruit from importers will demand the same low prices and shelf lives.

‘Terrifying’

Jack Fleming, Eddie’s son, also works in the industry as chief executive officer at trucking-logistics firm Chill-Chain, based in London. He called the upcoming Brexit deadline “terrifying,” pointing out that it takes three days to drive lettuce and tomatoes from Spain to the U.K., where it can then be sold as fresh for less than a week.

He fears potential delays at the EU-controlled checkpoints for the 11,000 trucks exiting the U.K. on a daily basis could lead to queues stretching back miles from Dover, disrupting the entire logistical network.

“There’s really not any slack, not with fresh produce,” he said. “There may just be cases where you can’t get it through in time for them to still be valid goods.”

--With assistance from Demetrios Pogkas.
To contact the reporter on this story:
Greg Ritchie in London at gritchie10@bloomberg.net
To contact the editors responsible for this story:
Eric Pfanner at epfanner1@bloomberg.net
John Lauerman
© 2019 Bloomberg L.P.
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