London’s Borough Market Invokes Contingency Plan for No-Deal Brexit
(Bloomberg) -- Borough Market in London has invoked a contingency plan and traders have begun stockpiling produce on concern that the U.K. might leave the European Union without an agreement on March 29. Business in the market has already slowed.
“Our traders are really concerned now,” Managing Director Darren Henaghan said in an interview. “They are good people, but they are scared. We now have everyone from our florist storing flowers through to bakers storing flour and just about everyone in between.”
The market drafted its contingency plan about six months ago and the steering group swung into action last month, Henaghan said. Among other measures, Borough has set aside extra storage space and has identified a site in northern France that could become a logistics hub for small traders to consolidate their orders into a container to smooth entry through U.K. ports.
But the market, which can attract thousands of people on a Saturday, is already feeling the effects of Brexit.
“February and March have been tricky,” he said. “Trade in January was good, but it’s been lower than expected since then.
And we’ve got traders delaying investment decisions. That’s much more universal than we thought it would ever be. It is concerning and if the exit process were to be extended for another two months, that would just mean more delays.”
There has been a market on the site, just south of the Thames river, for more than 1,000 years. Henaghan said it now attracts about 15 million visitors a year, and more than 100 languages are spoken across the floor.
Ewa Weremij of Emilia Ltd., who sources produce from small farms in northern Italy for her Bianca Mora stall, is worried. She stocks 30 to 40 varieties of cheese, including three different kinds of Parmesan, as well as 20 varieties of charcuterie.
“We have been here nine years, and we are a little bit scared because we already lost so much in the change of pound and euro,” she said. “And we don’t increase the price for now, but we have to look what is going to happen.”
“It is astonishing that so many of the traders have some sort of relationship with Europe,” Henaghan said. “Even somebody who farms beef in the (English) Midlands. They use chemicals, animal-welfare products, that come from Bayer in Germany; they have tractor parts that come from Italy.
“Others get their van and they drive down to southern Italy and they go round all those wonderful places and buy a little bit of this, a little bit of that and bring it back to the market and share it with me and you. That is going to be very, very difficult to do.”
French-born Sophie Bertucat, from St. Malo, who manages the Borough outlet of her brother’s Olivier’s Bakery, said Brexit may mean the business will have to avoid using French flour and switch entirely to British.
“For me, especially France, we have always been very close together so I don’t want to think about what is going to happen,” she said. “About the business, most of our products are coming from England, most of the flour, all the fresh ingredients we use are coming from here. There is only the French flour that we use for the pastries, the butter. If it becomes too expensive, we’ll switch to British.”
At the nearby Turkish Deli, owner Graham Teale said Brexit might be beneficial for him long-term if it allows him to bring in Turkish olive oil without EU tariffs. But short-term, he is concerned about the 25 varieties of traditionally cured, unmarinated olives and other produce that he imports. It comes on a truck through Bulgaria and reaches the U.K. via the French port of Marseille.
“The only preparation is speaking to my trucking company,” he said. “I’ll make sure I bring some (produce) in before March 29.”
Exporters are concerned, too. David Lockwood is managing director of Neal’s Yard Dairy, which specializes in British and Irish cheeses. American-born Lockwood said about 35 percent of the business is for export, and about 65 percent of that to the U.S.
“All our goods going to the U.S. run through Rungis, the big market in Paris,” he said. “They get consolidated onto containers there and it is massive the amount of change that it will entail should we need to abandon that route. That said, we’ve done a lot of work and we can export from the U.K.
“We are setting everything up to ensure that we’ve got as many bases covered as possible but that is just the external stuff. Internally, we have our staffing–we’ve got a lot of EU citizens. We’re willing as a business to pay for their registration. But we’re seeing it in our applications, our job apps. We are not getting the same kind of response from people from the Continent that we were.
“In terms of a future threat that concerns us, both from a retail and a wholesale perspective, it’s what is going to happen to the London economy over time. Is the finance sector going to scale back from London and move to Dublin or Frankfurt or wherever? How is that going to affect us? I’m not really sure how we hedge against that but it’s something that we are aware of.”
(An earlier version of this story misidentified Bayer in the ninth paragraph.)
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