Apetito, a major supplier of frozen and refrigerated food to the health and social care sector in the United Kingdom and other countries, is investing £5 million in planning and preparation ahead of what could be a “no-deal” Brexit scenario. The key aim is to optimize its ability to supply customers, many of whom are elderly and vulnerable people in hospitals and care homes. Others rely on meals-on-wheels delivery to their private residences.
Given the level of uncertainty that increased on January 15 when UK Prime Minister Theresa May’s proposed package for leaving the European Union was overwhelmingly rejected by a 432-202 vote in Parliament, and thus the heightened risk of a hard Brexit under which the British food industry could be severely disrupted, Apetito has gone ahead and implemented its stock contingency plan.
In the lead up to Brexit, the Trowbridge, Wiltshire, England-based company, a unit of Rheine, Germany-headquartered Apetito AG, will be significantly increasing stocks of “high risk” raw materials and finished goods. This plan has been developed from a detailed analysis of Apetito’s entire raw material and packaging supply chain, involving the approximately 700 items purchased to make value added products that range from cottage pie and roast chicken to curries, fish dishes and vegetarian items.
“Apetito supports the UK and Irish food and farming industry and has substantially increased its level of domestic procurement in recent years. However, a ‘no deal’ Brexit has major implications for the entire UK food industry as the food chain is significantly dependent of EU supply,” said Paul Freeston, chairman and chief executive officer of Apetito UK & Canada operations.
Stocks of raw materials in the “high risk” category will be increased from four to eight weeks’ worth of supply, while finished goods stocks are being raised from an average of five to six weeks. Accommodating these increases has necessitated the contracting of 1,200 additional pallet spaces of frozen storage to hold finished goods and raw material for the next six months, at a cost in excess of £100,000.
“Given the level of uncertainty, we are investing heavily in a contingency plan to protect our customers,” said Freeston. “We are proud to serve some of the most vulnerable in society and we are determined to do everything we can to maintain supply.”
With less than three months to go before the UK’s March 29 scheduled exit from the European Union, Labour Party MPs have demanded that the Prime Minister extend Article 50 to provide additional time for a consensus to be reached.
“We believe it is essential the current political stalemate is resolved so the food and farming industry can get on with its job of feeding the nation. This in turn requires frictionless trade with the remaining EU members, who form a vital part of the UK supply chain, stated Freeston.