More than a year has passed since the United Kingdom voted to leave the European Union. Since then we have had another general election, IndyRef2 put on hold, and, of course, Trump. Despite the various political and economic changes over the past year, there can be little doubt that Brexit will be the change that has the biggest impact on the food and drink sector in the UK.
Of course one of the biggest talking points during the Brexit referendum campaign was immigration, and the rights of EU migrants will be one of the most important aspects of the Brexit negotiations. Restricting immigration was ultimately one of the main drivers behind the Leave vote, and so it was always inevitable that one of the main casualties of the UK's exit from the EU would be the free movement of workers principle. This was confirmed in last month's Queen's Speech, which confirmed that this principle would be replaced with a UK Immigration Bill.
It is estimated that there are over 3 million EU nationals living and working in the UK, and certain industries and sectors rely on those EU migrants. However, some of those sectors reliant on EU migrants are already facing labour shortages – the food and drink sector being one of them.
The vast majority of workers in the fruit and veg sector, for example, are EU migrants, a sector already feeling the effects of labour shortages. A recent study, for British Summer Fruits, found that approximately 95% of those cultivating and harvesting soft fruit crops in the UK were from European countries. It's not just fruit and veg suppliers feeling the effects of staff shortages in the food and drink sector. Meat processing employers are also reliant on workers from the EU and are struggling to fill vacancies, and many bars and restaurants rely on labour from other EU countries.
If labour costs increase for businesses and/or supply decreases for consumers, then it is likely that food prices will rise in the UK. It has been reported that the cost of strawberries for consumers, for example, could increase by 50% if the Brexit deal results in labour restrictions. And spare a thought for the workers themselves, facing an uncertain future, uncertain whether or not they will have to relocate their families and look for new employment. It is no surprise then that a study by Deloitte found that more than one million workers from overseas were preparing to leave the UK within the next five years – worrying statistics for the food and drink sector.
Perhaps then the Government's recent Policy Paper, "Rights of EU Citizens in the UK," which states that "the UK Government has made it absolutely clear how important it is that we secure as early as possible both the rights of EU citizens in the UK and UK nationals in EU member states" will ease concerns in the food and drink sector. However, that very same Policy Paper is described as "an offer"; there is as yet no agreement and so no certainty, for EU workers or employers in the food and drink sector.
Employers facing labour shortages may then have to turn to other options. If the government do not intervene and if sourcing the labour domestically is not viable, then perhaps increasing the use of automation should be explored. Zume Pizza, based in California, are already using robotic machinery to make pizzas, and this has been suggested as a potential solution in the UK meat processing industry for example.
Employers in the food and drink sector should therefore be carrying out risk assessments to identify those workers reliant on free movement rights. As the use of automation increases in the sector, and if EU immigration decreases and labour shortages continue, maybe it's now time to call upon the robots?
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
