UK: food supply networks and trading rules

UK supermarkets are confident that they can cope with the effects of COVID-19 on the supply chain and that shopping patterns will eventually return to normal. But the coronavirus pandemic has awakened wider fears about the strength of the complicated supply chains that modern societies depend on (see BBC News: Business, 26 March). Half of the food consumed in the UK comes from overseas, with 30% coming from the European Union. The government is treating logistics workers as key workers, in the same way as emergency services and health staff. There is also spare capacity: for example, the closure of car plants means that their fleets of supply trucks will not be needed for the duration. Suppliers to the restaurants, bars and cafes that have been shut down already have the facilities and equipment to deliver food to supermarkets – refrigerated vans, food handling systems, warehousing. And the fall in the number of cars on the road means easier and speedier deliveries.

As borders across Europe have been sealed, exceptions have been made for the trade in goods. Goods are still arriving in the UK from Italy, for instance, even though the country is in shutdown. But it would only take one country to start banning the export of food for the whole system to be at risk, as others retaliate to secure their own supplies.

According to Peter Alexander, global food security expert, “If coronavirus has shown us anything, it is how complicated and delicate supply chains have become. After this crisis has passed, there is bound to be immense pressure on companies and governments to strengthen and simplify them.”

The UK Government is relaxing competition regulations to allow retailers to work together during the coronavirus outbreak (see The Guardian, 19 March). Supermarkets will be allowed to cooperate to keep shops open, to share distribution depots and delivery vans, and to share data with each other on stock levels. The Department for Environment, Food and Rural Affairs (Defra) is working with local authorities to extend the hours that deliveries can be made to food stores. The Department for Transport is also easing restrictions on delivery drivers’ working hours during the crisis.

UK retailers are also asking for relaxation of grocery code regulations. The code was developed to prevent big grocers abusing their power over suppliers. They cannot, for instance, halt orders without reasonable warning. The supermarkets say they now need the ability to make changes quickly so they can switch away from more obscure products to focus on essentials. The industry regulator, the Groceries Code Adjudicator, is expected to take a “pragmatic approach” to what counts as reasonable notice during the crisis, rather than alter the rules.