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Brexit: Food industry seeks no-deal competition waiver

August 7, 2019

 

 

The UK food industry has asked the government to waive aspects of competition law to allow firms to co-ordinate and direct supplies with each other after a no-deal Brexit.

 

The Food and Drink Federation (FDF) said it repeatedly asked ministers for clarity on a no-deal scenario.

 

Existing rules prohibit suppliers and retailers discussing supply or pricing.

 

The industry says leaving in the autumn could pose more supply problems than the original Brexit date last March.

 

The FDF, which represents a wide range of food companies and trade associations, said: "We asked for these reassurances at the end of last year. But we're still waiting."

 

The boss of one leading retailer told the BBC: "At the extreme, people like me and people from government will have to decide where lorries go to keep the food supply chain going. And in that scenario we'd have to work with competitors, and the government would have to suspend competition laws."

 

A government spokesman said: "The UK will be leaving the EU on 31 October and our top priority is supporting consumers and businesses in their preparations for Brexit.

 

"We are working closely with the food industry to support preparations as we leave the EU."

 

There is a precedent for the government or competition authorities to act in this way, with the government pointing to four previous examples of such orders having been made - three in relation to the defence industry (one of which was subsequently repealed), and a fourth made regarding arrangements for the supply of oil and petroleum products.

 

But John Fingleton, the former head of the Office for Fair Trading, warned: "The last time something like this happened was in relation to dairy prices in 2001 when companies incorrectly thought government words about higher prices for dairy farmers would protect them from competition law. It did not."

 

As a consequence, supermarkets faced huge fines for price fixing.

Which industries could suffer from a no-deal Brexit?


The cross-party Exiting the EU Committee has warned that a no deal could mean "damaging consequences" for sectors such as:

 

Car industry


Food industry


Services businesses


Farming


Pharmaceuticals


Chemicals


Technology


Higher education

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