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The Great Brexit stockpile: Britain companies braces for no deal

The UK is due to leave the European Union in 10 weeks and, as of now, there's no deal in place to ensure trade routes aren't strangled

Bloomberg  |  London 

Brexit

is unlikely to feature in the annals of military history, but Britain is getting a taste of wartime stockpiling again.

Away from the political conflict in Parliament, companies are busy turning the country into a warehouse as executives prepare for the economic chaos that the government and opposition parties have yet to demonstrate they can avoid. The UK is due to leave the in 10 weeks and, as of now, there’s no deal in place to ensure trade routes aren’t strangled.

Factory floors and storage facilities are filling up as manufacturers accumulate everything from printing ink and packaging to aircraft parts and tinned food. Business Minister Richard Harrington declared that “nearly every square meter” of warehouse space in the country is now full.

Businesses from engine-maker Rolls Royce Holdings to brewer Heineken have outlined plans to hoard in case a tumultuous chokes just-in-time supply chains and creates backlogs at ports. Associated British Foods, whose products include some of the country’s most popular tea, bread and sugar, is buying ingredients, packaging and machinery ahead of time to mitigate the risk of any disruption. Drugmakers are adding to inventories of key medicines such as insulin.

“Planning for anything other than no deal doesn’t make sense, because there isn’t any evidence that there will be one,” said Brian Palmer, chief executive officer of Tharsus, a maker of robotics and hi-tech machines based in northeast England. “It’s not an optimal way to run a manufacturing organisation.”

Tharsus is stocking up on the motors and pumps it needs to keep producing for its clients around the world. It’s also increasing output to ensure it can deliver April’s demand in March, the month the UK is due to leave the EU.

The events of this week will have compounded the concerns of corporate Britain. Prime Minister Theresa May’s agreement was resoundingly rejected in the House of Commons on Tuesday. She won a no-confidence vote in her government 24 hours later before starting cross-party talks on how to navigate the country out of its political paralysis.

So far, opposition Labour Party Leader Jeremy Corbyn is refusing to engage. May has until Monday to come back to Parliament with a Plan B.

First Published: Fri, January 18 2019. 23:52 IST
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