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Food Industry Professionals Warn of Brexit Impact

black cockrel

Ranjit Singh Boparan, who is the owner and founder of the 2 Sisters firm, has warned that voting to leave the EU could be potentially harmful for the food industry in the UK.

"A vote to leave the EU has the potential to decimate the British food industry. It's already a tough environment; highly labour intensive, high volume, producing very low cost products for low margins, and operating in a deflationary market,” he said. "The additional challenges Brexit could create for my industry will put many businesses at risk and I don't think that's a risk worth taking."

Mr Boparan is one of the latest of a number of industry figures to weigh in on the debate. He is in a considerable position of authority, however; he currently stands at number 267 on the Sunday Times Rich List thanks to his fortune which is currently estimated at around £430 million. Much of this comes from 2 Sisters, the firm he owns.

The 2 Sisters stable includes several huge brands such as Fox’s Biscuits and the Goodfella’s pizza line, which makes it a major player in the UK food market. They even supply a third of all of the poultry which is eaten in the UK, and Mr Boparan has at times in the past been known under the nickname “the chicken king”.

His warning comes as the UK prepares to vote in the referendum as to whether the country should remain part of the EU or leave, due to take place in June. Mr Boparan is concerned about the fact that many British food farmers and producers are actually reliant on the single market, which provides plenty of advantages in terms of export and import. He says that this will directly impact on those producers. He is also concerned about the risk of packaging costs going up, as well as the cost of ingredients which are sourced from countries within the EU.

2 Sisters also have bases outside of the UK, in European countries such as Poland. It is clear that a break from the EU may cause some problems for the company on this front, though at this stage it is difficult to assess exactly what those problems may be or how far they may affect production and profits.

The debate will continue to rage over the next month, but only once a decision has been made will we be able to see the consequences. Anything predicted by either side of the debate is currently speculation – it is difficult to assess exactly what the impact on the UK food industry would be if a Brexit was decided upon.

If you are concerned about the future of jobs in the UK food industry, we do have a range of international food jobs available. Giving you the chance to travel as well as enjoying a new culture, these opportunities exist both inside the EU and in other countries around the world.

On the other side of the debate, Nestle have played down fears that the Brexit could affect them negatively.

“I am quite confident wisdom will prevail,’’ says Nestle SA Chief Executive Officer Paul Bulcke, speaking of his expectation that the UK public will not vote to leave the EU. Even if they do, his claim is that the Brexit would not have a huge impact on the company’s fortunes – and may not even be in the top 10 risks that they are currently worried about.

Paul Bulcke sat thinking

Image credit for Paul Bulcke

Other food industry giants have chosen to stay out of the debate, amongst fears that they may alienate shoppers by choosing a side. Tesco Plc have stated that the decision is one to be made by the British public, not by retailers.

The main concern for most within the food industry is that trade barriers may be implemented, contrary to the current free trade agreements which are part and parcel of being in the EU. It’s also worth noting that many of the workers in British food production factories are now immigrants from countries in the EU – particularly Lithuania and Poland. The question of what will happen with these workers and their influx is a key one to the Brexit issue.