The Grocer – 17 August 2019

Get the full story at thegrocer.co.uk 17 August 2019 | The Grocer | 5

The National Sheep Association has held initial talks with government over a bailout

Restaurants and cafés warned over impact of no-deal

year. However, in a worst-

case scenario with much

greater disruption, the

eating-out sector could

decline by as much as

£5.4bn.

Low consumer confi-

dence would force people

to eat out less and limit

discretionary spend,

MCA Insight said.

In light of this, opera-

tors and manufacturers

needed to ensure they

had a plan to maintain

A no-deal Brexit could

cost the UK eating-

out market as much as

£5.4bn next year, MCA

Insight has warned.

The William Reed-

owned agency predicted

that leaving the EU with-

out a deal could have var-

ying degrees of impact on

the market.

It suggested that a “dis-

ruptive” no-deal was

expected to lead to a fall

of at least £3.4bn next

share and look to grow

in what could become an

even more challenging

market, analysts added.

The sector has already

shrunk 1.9% since the

Brexit referendum –

equating to a drop of

£1.4bn in value – accord-

ing to MCA. It is now

worth £91bn.

Daljit Johal, data sci-

entist at MCA Insight,

said it was clear Brexit

had already had a

Industry urges details on no-

deal Brexit support pledge

Ian Quinn

Industry leaders have

welcomed plans for a

government bailout for

businesses in the firing

line of a no-deal Brexit,

but called on ministers

to urgently release more

details of which compa-

nies will receive help.

Operation Kingfisher,

as it has been billed, has

been devised by former

Defra secretary Michael

Gove to co-ordinate sup-

port for businesses most

at risk of financial cri-

sis that were “otherwise

fundamentally viable”.

This week industry

leaders applauded the

initiative, which they

hoped would help busi-

nesses cope with poten-

tially catastrophic

cashflow problems such

as the imposition of WTO

tariffs and likely supply

chain disruption.

However, concerns

were expressed that with

fewer than 80 days to

go until the 31 October

deadline, firm details of

the bailout have yet to

materialise.

“This is great news,”

said Freight Transport

Association deputy CEO

James Hookham. “The

government has recog-

nised the industry is fac-

ing a cashflow crisis if

we get the worst possible

result of a no-deal Brexit.

“To me the significant

thing is it’s the govern-

ment admitting the con-

cerns of the industry are

real. This is recognition

that it’s not Project Fear

but Project Fact.”

However, there are

reports that fewer than

1,000 businesses might

eventually make it

on to the list of com-

panies helped by the

government, with – as

well as food – manufac-

turing and construction

among those areas likely

to be hardest hit.

A spokeswoman for

the National Sheep

Association said initial

talks had been held with

ministers about a bail-

out, after reports showed

farms in the UK would be

left facing huge tariffs on

exports to Europe in the

event of a no-deal. The

NFU has warned it could

lead to a mass slaugh-

ter of lambs in the UK

because of the reliance

on exports to France.

“The talks have been

very provisional at this

early stage, but have

focused on the idea of

the government paying

a one-off sum based on

a headcount of breeding

ewes that will produce

lambs next year,” said

the NSA spokeswoman.

“It’s a sign that the gov-

ernment is increasingly

aware of the reality fac-

ing British farmers in the

event of a no-deal Brexit.

However, we urgently

need more detail.”

A senior retail source

said there had been ini-

tial discussions with

government about the

bailout. “It would pro-

vide important support

for small businesses that

may struggle in a no-deal

scenario,” he said.

detrimental impact on

the market.

“However, our fore-

casts predict even big-

ger problems if the UK

leaves the EU without

a deal. A no-deal Brexit

will reduce UK GDP by

between 4.75% to 7.5%

and slash up to £5.4bn

off the forecasted value of

the UK eating-out market

in 2020,” he said.

“A no-deal Brexit will

have clear implications

on consumer confi-

dence and spend. Rising

inflation as a result of

increased input prices

will squeeze household

incomes at a time when

consumers are limiting

discretionary spend.”

Household saving was

currently at a record low,

added Johal. “However,

we expect this to change

as precautionary con-

sumers save due to eco-

nom ic u ncer ta i nt y.”

Focus on Roast Dinners
p

g1933_04_N1_spread.indd 5 15/08/2019 16: