Wire Service
3 minute read
27 Aug 2021
1:02 am

UK facing supply crunch thanks to Covid and Brexit


The British Retail Consortium warns the situation will worsen in October, when imported EU animal products require new border checks.

Trucks leave the ferry terminal in Calais. (Photo by FRANCOIS LO PRESTI / AFP)

Britain’s factories, restaurants and supermarkets are facing stubborn supply problems due to the Covid pandemic and Brexit, sparking calls this week for government help ahead of Christmas.

US burger chain McDonald’s ran out of milkshakes and bottled drinks this week, blaming a lorry driver shortage that created supply chain issues and a slowdown in UK business activity.

Rival fast-food giant KFC was forced to remove some items from the menu, while restaurant chain Nando’s has temporarily shut 50 outlets due to a lack of chicken.

Supermarkets are also feeling the heat, with frozen-food group Iceland and retail king Tesco warning of Christmas product shortages.

– ‘Sounding the alarm’ –

“The reason for sounding the alarm now is that we’ve already had one Christmas cancelled at the last minute,” Iceland boss Richard Walker told the BBC.

“I’d hate this one to be problematic as well,” he added, urging the government to classify foreign lorry (truck) drivers as skilled workers to allow more on the roads.

Britain’s powerful CBI business lobby warns retail and distribution stocks are at a record low. 

Walker estimates Britain currently faces a shortage of about 100,000 lorry drivers.

“We’ve got a critical shortage now, which we can’t address simply by recruitment because of the length of time it takes to train lorry drivers,” said Rod McKenzie, director of policy at the Road Haulage Association.

“So we need some help to make sure the wheels don’t fall off almost literally in the Christmas season,” added McKenzie, who wants short-term visas for overseas lorry drivers.

– Brexit worsens pandemic impact –

Covid helped spark a supply-chain crisis, experts say, as multiple lockdowns prompted a fresh exodus of EU workers.

“The immediate cause of general disruptions to supply is the ongoing impacts of the pandemic,” King’s College London economics professor Jonathan Portes told AFP.

“It is hardly surprising that closing down very large sectors of the economy and requiring millions of people not to work, and then reopening those sectors — not once but several times — would cause disruption to supply chains and mismatches in the labour market. This is true across Europe.”

Brexit meanwhile created major border delays after Britain’s exit from the European Union on January 1, while new immigration rules disrupted recruitment.

That resulted in fewer EU nationals working in the logistics sector, which tends to be shunned by Britons due to low pay and long hours.

The pandemic then persuaded even more foreign workers to leave.

“Ongoing travel restrictions combined with the impact of Brexit … mean that many have not returned and may not want to do so,” he said.

– Empty shelves –

The British Retail Consortium warns the situation will worsen in October, when imported EU animal products require new border checks.

“Empty shelves (and) delayed or cancelled deliveries have become a familiar sight for many, as companies struggle to meet demands … with decreased capacity,” said Jonathan Owens, a supply-chain expert at the University of Salford.

Meanwhile, Britain’s carmakers are slamming the brakes because of staffing constraints and a global shortage of microchips.

Car sales slumped by almost a third in July, as production tumbled nearly 40 percent to the lowest level for the month since 1956.

Britain’s composite purchasing managers’ index, charting private sector business activity, hit a six-month low in August due to staff and supply shortages — but nevertheless remains in expansion territory.