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One Year Until Brexit: Hospitality Sector View

Unless you have been in a cave on Mars you will be aware that “Brexit is looming”, and arguments to remain or leave are in the news daily. But what will the consequences be for the Hospitality Industry now that the UK will be leaving the EU?

European workers currently make up a quarter of the Hospitality Industry’s workforce, so the UK could inevitably face an even bigger shortage of Chefs and kitchen staff, and what will the implications be for restaurants and other eateries in the UK? The cost of raw products has tripled on some products, with some ingredients increasing by up to 20%. Those establishments that cannot increase their prices or can’t absorb the increases are in serious trouble.

Commercial insurer NFU mutual have recently released a hotel confidence report and CLH News contacted Darren Seward, hospitality specialist at commercial insurer NFU Mutual, who shares his thoughts : “In an industry so reliant on reputation, loyalty and recommendation, there is concern that after Brexit businesses won’t have the staff to carry out basic functionality and keep guests happy and returning.

“Just a handful of businesses had been able to plan or prepare for Brexit in 2017, which is unsurprising given the ‘unknown’ to plan for. While it may seem impossible to prepare right now, businesses should start thinking about how they would manage a changed employment and supplier landscape. For example, some businesses have started working with colleges to help make hospitality more attractive to young British people.

“My hope for the year ahead is that we will begin to have reassurances and answers to give businesses the proper time and head space to plan.
“That said, the way that the food service industry approaches supply strategies is already changing. A Brexit-induced drop in the value of sterling has contributed to significant price rises in imported produce, forcing retailers and hospitality businesses to improve supply efficiencies, reduce margins or increase prices for consumers. In attempts to offset rising import costs, businesses are bidding to source more goods produced in Britain.

“Our research also found that 99% of consumers would buy more British or local food if retailers made it easier for them, with almost half (49%) considering products to be ‘most British’ when the ingredients are grown here. British food also has its advantages through a shorter and better regulated supply chain that may be more manageable and less likely to be susceptible to fraud.

“Hospitality businesses should familiarise themselves with the potential effects and the vulnerabilities they may be exposed to as a result of Brexit, to safeguard against potential unexpected consequences such as increased import costs that may encourage alternative – and less secure – means of supply.

“Business owners may feel at the mercy of food producers to mitigate risk, but they too have a duty to ensure that the food they sell is legitimate and safe and to improve consumer confidence, especially given that they are not immune to the reputational consequences of not doing so.”

A PDF copy of the NFU Mutual Hotel Confidence Report can be found at www.nfumutual.co.uk/hotelconfidencereport

A PDF copy of the NFU Mutual Food Fraud Report can be found at www.nfumutual.co.uk/foodfraud

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