The Brexit Stockpile

19 October, 2018

Continuing with the Brexit theme after our blog past last month on the government’s advice for the food sector, this month, we are looking at the impact on food storage in the UK. The effect that Brexit will have on the food and drink industry is still largely unknown. Suppliers are beginning to create Brexit contingency plans for the possible need or desire to store more produce in the UK.

There has been plenty of speculation in the media recently about potential shortages of specific types of food produce after Brexit. In particular, for those products that we rely heavily on European imports for. The government have even announced plans to stockpile certain foods that could be in short supply after Brexit. In the build up to Brexit, this means that suppliers may want to keep a larger store of those products that may be difficult to come by later next year. There is also the fear that companies will be faced with an insatiable amount of red tape to import and export food produce, that it becomes more cost and time effective than the company can handle.

The need for extra storage comes up against the significant lack of warehouse space in the UK. Savills reported on this issue a year ago and said that some companies are creating underground storage facilities. Brexit has brought the issue back into the limelight. If the shortage was an issue a year ago, it will become even more of an issue if the need for storage increases after Brexit.

With development focussed on residential, commercial developments for new warehouse space are lacking. Developers do not want to take the risk of starting a commercial development without tenants lined up to take occupation. Occupiers seem to be struggling to find warehouse space they can afford. Amazon and online retailers generally are taking up a lot of space to ensure their locations are spread widely around the UK to feed the public’s desire for fast delivery when online shopping. Due to larger companies taking up space, the availability for smaller companies just isn’t there. The lack of space leads to an increased demand which leads to landlord’s driving up rents.

Perhaps it is the developers that will be the solution. Those willing to take the risk to create new commercial spaces with a view to there being an increased demand in the lead up to and after Brexit.