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Survey Results

Brexit: 60% of firms fear UK leaving EU will push up ingredients costs

Vince Bamford

By Vince Bamford+

12-Jul-2016
Last updated on 12-Jul-2016 at 13:37 GMT2016-07-12T13:37:23Z

Firms fear Brexit will push up ingredients costs: Pic © iStock/miriam-doerr
Firms fear Brexit will push up ingredients costs: Pic © iStock/miriam-doerr

Almost 60% of BakeryandSnacks readers believe the cost of ingredients will rise should the UK leave the European Union – while almost three quarters feel Brexit will push up retail food prices.

BakeryandSnacks has conducted an online survey among readers that reveals some of the key concerns of firms inside and outside the UK over the impact of Brexit.

The cost of labour and ingredients will be higher and, together with weaker pound it would force prices up,” commented one respondent.

This has all the markings of either hitting the fan or finding a pot of gold,” suggested another. “Personally, I think the fan option is the most likely.”

Just 30% of readers ‘agreed’ or  ‘strongly agreed’ with the statement that Brexit will have a positive impact on their firms.

In contrast, more than 40% felt leaving the EU would bring a decline in sales for their business.

'Brexit is going to make things complicated'

I sell machinery to the UK,” commented one reader. “So Brexit is obviously going to make things more complicated.”

But another suggested: “Since it's the major retailers that make the rules, Brexit won't have a major impact on bakery.”

In addition to many respondents being concerned about an increase in the cost of ingredients, around 45% said they thought Brexit would force them to find new ingredients suppliers – although a similar proportion felt this wouldn’t be the case.

Poll Respondents

Who (role)

  • Sales/business development: 23%
  • General management: 15%
  • Quality assurance/control: 10%
  • Research/academic: 10%
  • Marketing/comms: 9%
  • Analysis/consultancy: 7%
  • Production: 5%
  • Other: 21%

What (industry)

  • Bakery: 30%
  • Other foods: 16%
  • Ingredients: 14%
  • Packaging/processing: 10%
  • Health/sports foods: 7%
  • Other: 23%

Where (located)

  • UK – 45%
  • Other EU – 25%
  • US – 11%
  • Other – 19%

Brexit Vote (UK respondents only)

  • Remain: 72%
  • Leave 28%

Readers were more positive when it came to product and ingredients supply, with more the half our respondents saying they ‘disagree ‘or ‘strongly disagree’ that Brexit would result in supply chain disruption.

Impact on recruitment

Opinion was split fairly evenly when it came to impact on recruitment, with around 44% ‘agreeing’ or ‘strongly agreeing’ it would be more difficult to source unskilled labour and 45% feeling it would not be more difficult.

One respondent said it was essential the UK negotiate membership of the European Economic Area, giving access to the single market and free movement of labour, adding bluntly: “Anything less and we are doomed.”

More alarming, perhaps, is that fear of almost a quarter of firms that Brexit would increase redundancies in the short-term.

Reduction in investment

Investment was another topic that divided respondents fairly equally, with 44% agreeing Brexit will reduce the investment companies make in the UK and 46% feeling this would not be the case.

One respondent voiced concerns about EU investment: “My business is in an area that has, in the past, benefited from EU investment. I am concerned about this opportunity drying up.”

A quarter looking at relocation

Given such fears, just under a quarter of UK-based respondents who took part in our survey said they would consider relocating their business outside the UK, with one saying it was already looking into options.

Another voiced what is likely to be the feeling of many firms: “My company can't relocate, but can only try to mitigate the consequences of the Brexit.”

On a brighter note, food suppliers are generally confident food safety standards will be maintained, with only 11% feeing food safety may reduce post-Brexit. Just over 60% of respondents say they expect the UK will continue to apply EU food, beverage and feed legislation.

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