Daily Management Review

UK companies are stocking up for a rainy day


In anticipation of Brexit without an agreement, British companies are packing their warehouses with a wide variety of goods, ranging from food and ending with drugs and car parts.

Secom Bahia
Secom Bahia
Nobody wants to leave Europe without an agreement. However, the British business is stocking up with absolutely everything in case of supply disruptions. Goods and products are purchased so much that the vast majority of warehouse space is full.

The largest supermarket chain on the islands, Tesco, has rented a huge amount of additional refrigerators in case of a “hard landing”. Marks & Spencer has been stocking non-perishable goods for more than a week. Pharmaceutical giants are now urgently renting warehouses for drugs and vaccines, and automakers are stockpiling parts and components.

Warehouses are now perhaps the most popular type of property in the UK. The UK Warehousing Association (UKWA), which has approximately 9.3 million m² of warehouses in all the counties of the kingdom, claims that three-quarters of their warehouse space is already full. Every day, free space is rapidly decreasing.

“We are threatened by the “perfect storm” in the warehouse sector and logistics...” said a statement from the UKWA.

The statement also stresses that in the fourth quarter of 2018, 85% of the members of the Association received appeals related to Brexit.

Now there is no sector in the British economy which wouldn’t urgently stocking up in case the kingdom leaves United Europe without an agreement.

Naturally, creation of large stocks of especially food is a difficult process due to the huge amount of perishable products. As the UK’s official exit date from the EU is approaching, which no one has yet canceled, the vast majority of companies, such as Gate Gourmet, which supplies 20 airlines with products at 10 British airports, began to stockpile frozen pizzas, lunches and dinners.

Stockpiling sellers respond to the fears of the British inhabitants of the general deficit after March 29. The atmosphere among the population is slowly condensing toward panic. The answer to these fears were, for example, Brexit Box kits for 295 pounds ($ 386) of Emergency Food Storage with frozen foods for a month, filters for water purification and means for making a fire.

Business is very dissatisfied with the current uncertain situation, because, for security reasons, it must spend a lot of money on renting storage space, although the “civilized” Brexit version is much more likely to be hard.

The most difficult situation is with fresh products. Each product has its own, and often expensive, storage. Strawberries, for example, have to be irradiated, and apples should be stored in dark, cool rooms with a high content of carbon dioxide in the air, etc. However, most fresh produce cannot be stored for long.

There is also a special conversation about automakers. They have non-perishable goods - spare parts, but there are a lot of them and they require a lot of storage space. For example, only BMW in the UK imports about 2 billion pounds of spare parts from the EU every year.

Not surprisingly, BMW, like its colleagues, Nissan, Toyota and Honda, has problems with storing parts.

UK Health Secretary Matt Hancock is working closely with pharmaceutical companies to prevent a possible shortage of drugs and medicines after Brexitis. Thus, according to the UK Pharmaceutical Industry Trade Association (ABPI), AstraZeneca increased the volume of drugs ready for shipment to pharmacies and hospitals by 20%. The company also spent £ 40m on preparing for the hard Brexit, which included building laboratories in Sweden to analyze drugs.

French pharmaceutical giant Sanofi leased additional storage capacity for drugs and vaccines that require low temperatures. In addition, the company is trying to transfer a number of manufacturing operations to the continent.

The authorities are trying in every way to prevent the appearance of panic. To this end, for example, the government has signed an agreement with many companies and organizations that prohibits them from disclosing warehousing information related to Brexit. For example, only the Ministry of Health concluded such agreements with 26 companies.

source: theguardian.com