Last month, Marmite managed to leave a nasty taste in the mouth for even those of us who like it. Unilever’s attempt to increase the price, allegedly in response to rising costs as a result of a Brexit-inspired falling pound, was fought off by plucky old Tesco. Critics pointed out that Unilever had also benefited from the falling pound because it exported so many of its products. The company backed down and Tesco won the day. Hurrah. The diehard Brexiteers were able to claim that the portents of doom around our leaving the EU were misplaced. It was buttered toast all round.
Except the Unilever story has managed to obscure the reality, which is this: when it comes to food, Brexit has utterly screwed us all. I ran into a friend recently who runs a food import and restaurant business. They spend more than £10m a year on produce, purchased in euros. Because of the falling pound their costs have gone up by 20%. They have to find an extra £2m just to stand still. I spoke to a man in the steakhouse business, who imports beef from the US. It was chaos, he said. The falling pound against the dollar had decimated the business.
You can dismiss these as merely challenges for those wealthy enough to visit restaurants. And anyway, surely importing beef from the US is a bad idea? You have a point. Shouldn’t they be sourcing everything from within the UK?
In a perfect world they would. But this is where it gets tricky, because there isn’t enough high-quality beef in the UK. And it’s that issue – a lack of British produce writ large across the entire domestic food chain – which is the real problem. Even before the vote we were producing considerably less than we consumed. Factor in exports and only 50% of the food we consume in the UK is actually produced here.
And now a number of other things kick in. First, as a result of the falling pound exporting produce becomes only more attractive for farmers, and there’s a plentiful supply of takers. Second, the uncertainty created by Brexit means that farmers have no incentive to invest in increased production until they can see what the future holds. We are utterly at the mercy of those increasingly expensive imports. The price of domestic milk may still be disastrous for farmers, but its by-products – cream and butter – are decided by the European cream market and are now priced 108% and 144% higher than they were in April. Tea has gone up by 50%.
The long-term prospects are no better. Over the years I’ve got to meet a lot of farmers; generally, I like their no-nonsense stoicism. But God knows what came over them when they voted en masse for Brexit. There are major faults with European farming subsidies, but if they think a post-Brexit world will replace all of them they are fooling themselves. And an end to free movement of labour will remove the armies of eastern Europeans who come here to do the agricultural work others will not. Without them we will simply not be able to get the harvest in. Dismiss all this as merely the rantings of a disappointed diehard Remainer if you like, but the truth is I can afford the increases. It’s the others I worry about; the ones who may have to make do with toast and Marmite.
