Tesco stockpiling food for a no-deal Brexit — but CEO warns of fruit and veg disruption

·Senior City Correspondent, Yahoo Finance UK


Tesco (TSCO.L), Britain’s largest supermarket chain, has begun stockpiling food in preparation for a possible disruptive no-deal Brexit.

CEO Dave Lewis said on Thursday that “sensible” Brexit contingency planning is under way and Tesco is working with suppliers to stockpile goods.

But Lewis warned that fresh food such as fruit and vegetables could not be stockpiled due to its shorter shelf life.

“It’s hard to contingency for fresh food, where we can’t stockpile,” Lewis said. “Like other retailers, we’d be keen that there is no friction at the border given the UK imports half of the fresh food it eats.”

Britain is due to officially leave the EU on 29 March but has yet to approve a deal with the EU on future trading arrangements. It means the chances of a disorderly no-deal Brexit are rising.

Under such a scenario, trade between Britain and the EU would revert to World Trade Organisation rules. This would involve more stringent customs checks and would likely slow trade flows by increasing the time taken to cross borders. Earlier this week, the government rehearsed a traffic jam of lorries in order to see what no-deal Brexit trade may look like.

With delays likely, the government last month told UK supermarkets to begin stockpiling goods in preparation for a no deal Brexit. Storage warehouses warned in November that the UK was already running out of space to stockpile food as retailers rush to guard against unwanted disruption.

Lewis’ comments came as Tesco announced a 2.2% rise in UK like-for-like sales over Christmas. For the third quarter as a whole, Tesco recorded comparable UK sales growth of 0.7%. Tesco shares were 0.8% higher.

READ MORE: What a second Brexit referendum might look like

With files from Press Association.

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