Well there are still a lot of unclear elements right now which aren’t making easy to imagine a realistic scenario but we can for sure try to to put together some of the possible outcomes.
We all know we were already leaving a shortage of chefs and kitchen staff. Many KP’s, Catering Assistants and Chefs who work in kitchens in the UK are EU Nationals. There are 1.73 million EU Nationals living in the UK, 79% of which are employed. Even though kitchens are constantly searching for qualified chefs and is not the easiest task!
Slowing EU immigration might probably mean slowing the competition and rising salaries or at least this is the first conclusion that can jump in your mind. This might sound a good news but things are bit more complicated and the reality is that the number of jobs available could start to decrease shortly. There are some elements which may suggest this outcome:
Devaluation of the £ on €
Many suppliers import food from Europe and until Thursday the strength of the British Pound over the Euro was guaranteeing a very good power of purchase for British importers. But from Thursday the £ value started to fall. During the second half of 2015 the value of the British sterling was quite stable between these values Min 1.34 € (13th Oct 2015) and Max 1.44 € (17th Jul 2015). But from the beginning of December the threat of Brexit started to bring the dark in the markets and we have seen the value of £ fall from 1.42 € on the 30th of November to a scary 1.19 € today 5th of July 2016. At the moment when the results of the referendum have been announced the British Pound has seen the biggest drop in 30 years from 1.30 € to 1.22.
But what does it mean in our everyday life?
Let’s say that you use an Italian oil for you restaurant and the original price in € is 5€/litre.
In August 2015 you were paying that oil £3.47/Litre
Today due to the British Pound devaluation you pay the same oil 4.20/Litre
And this is just the oil, imagine all the products you use in the kitchen which have foreign origins, cheese, wine, olives etc… even some of the products you can find on Kitchen Social Club will probably see a price rise. In fact our knife bags of the Ultimate Edge are imported from US and the devaluation of the £ make much more expensive for us to buy them and import them. Our chef jackets and trousers are imported from Italy and also those will be more expensive for us to buy.
You can easily understand that this will have an impact on your costs and so you will probably need to rise prices as well.
The risk is that a lot of small local restaurants and pubs will go out of business because they can’t afford the general price rise and they don’t buy enough quantity to get anyway good deals from suppliers. While instead big restoration chains and hotels, which have the assets to purchase in big quantities, won’t be affected in the same way and probably on mid-long term they will see a business growth as consumers will choose the big chain with smaller price than a local gastropub where prices became prohibitive.
Someone says is already feeling the effects of it like Che Tom Van Zeller which blame Brexit for the closure of his restaurant in Yorkshire Harrogate’s Van Zeller. He says:
“The problem is that I have been through one recession – I opened in 2009 – and I had always hoped that the economy would recover. And then the last week has been a real kick in the nuts with Brexit,” van Zeller told The Caterer.
“Certainly, Brexit has made a difference. If people are contemplating whether or not they can afford the Euros to go on holiday, the last thing they want to do is come here and spend £50 on their dinner each.
“Without Brexit I would have had a bit more faith that the economy would have continued to improve. It is the uncertainty and I can’t operate on those lines. I don’t want to go through it all again. I have a son of nine weeks of age and I turn 40 this year and I am just taking stock of where we are with it all.”
Information Source: The Caterer
If we have seen the fall of the British Pound after the referendum which is not a legal commitment to leave EU, immagine what could happen when the next prime minister will trigger the famous article 50 which is the actual legal act which starts the process of UK leaving EU.
What can you do to limit the damage. Talk with your suppliers, listen to their thoughts and try to to get a long term deal which protect you from the devaluation or that limit the effect of it. It will be hard but it’s not just the government the need to start the negotiations is you as well iif you want your business to survive this big change.
Trading tariffs and import taxes
You probably have heard a lot about the “single market”, the exact definition is:
The European Single Market. The Single Market refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services.
In practice this means that being part of the single market eliminates all quotas and tariffs (duties on imported goods) on the goods you buy from other countries included in the single market for example: France, Italy, Spain, Germany etc…
If UK will not be part of the single market, won’t benefit anymore of not paying duties on imported goods which again will lead on costs increase for your business and so most probably a price rise for your consumers. Again this is not a good news for small businesses.
Troubles in the kitchen
It is very sad to be witness of the acts of xenophobia that we have seen across the country during the days following the referendum. Something is broken and too much hate has been spread through our streets in these days.
It doesn’t matter if you voted leave or remain, this is something which need to be stop and I think must be a commitment of everyone to prevent anything like this to happen in our kitchens.
Especially in big cities like London kitchens are populated by folks from all over the world, British, Europeans, South Americans, Africans and more, and the risk that hate knocks to your door is very high especially considering that kitchen is already an high-paced environment where easily emotions can overcome and flow into over-reaction and offensive words. All of us need to take this in consideration and need to take action in order to avoid any episode of xenophobia and racism.
My suggestion is to make sure your staff is a real team. Try to find sometime to spend together out of the kitchen to make sure everyone know each other as a person not just as a head chef, KP, the manager or the chef de partie. Is your responsibility to create a friendly and calm environment where no one feels unwelcomed. Do not have any mercy for any act of xenophobia from members of the stuff, report it to your superior and take the necessary actions to avoid a second case in the future if you are in charge of the kitchen or of the restaurant.
This is a real threat for the business, we all know how a kitchen works and that something like this can totally destroy your service and your business.
Domestic Agriculture and Farming damage
The Common Agricultural Policy is a cornerstone of the EU, costing nearly 40pc of its budget or €58bn a year.
Set up in 1957 to sustain the EU’s food supplies by boosting agricultural productivity, the CAP provides financial support to some 12m farmers across Europe.
The CAP scheme has two main pillars: direct payments, known as the Basic Payment Scheme (BPS), and funding for the wider rural economy.
In 2015, UK farmers received almost €3.1bn (£2.4bn) in direct payments, according to the NFU.
Farmers have access to the €5.2bn (£4bn) pot of funding that has been allocated to the UK for rural development projects over the period 2014-2020, including €2.3bn that has been transferred from the BPS to the UK rural development programmes.
In total, 55 per cent of UK total income from farming comes from CAP support.
Simply removing the CAP support, while it remained in place in the rest of Europe, “could devastate British farming”, Meurig Raymond, the NFU President, told the BBC recently.
Consultancy Agra Europe suggests land prices would crash and 90 per cent of farmers could go out of business.
It concluded: “What is certain is that no UK government would subsidise agriculture on the scale operated under the CAP.”
So if you were thinking to just supply from british farmers you will probably need to deal with the fact that there won’t be many anymore and that prices will be higher than now also internally.
Culinary Diversity and Innovation
You might not like immigration but I think we can all agree that the culinary art development is based on diversity. We all can learn a lot from chefs from other countries with different cooking traditions and ingredients. History taught us that innovation comes from experimenting new combination of tastes and techniques. It isn’t by chance that one of the most loved dish in the world, the Italian Pizza is a great mix of cultures: Tomato is a fruit discovered in the Americas only after 1492, Mozzarella di Bufala is made of milk of Buffalo, an asian animal imported in Italy during the barbarian invasions, Basil comes from India.
And again if you look at the life of the greatest chefs in the world, they invested a lot of time in different countries to learn more about cooking traditions and techniques, discovering new elements and spices to cook with and so on.
The risk is that for British young chefs will be more difficult to have experiences abroad and get in touch with different cultures.
Let’s bare in mind that Brexit didn’t actually happened yet and anyway we won’t actually be out from EU for at least 2 years.
Also we don’t know which kind of agreements the UK government will be able to deal with the EU and other markets. Even though it doesn’t sound EU is very keen to make life easy for UK and that they are probably committed to make of UK an example for the other countries of the Union which are thinking to take the same path. I see an hard negotiation on the horizon.
Please remember that is not just the government that will need to start the negotiation, if you own a business or you are an important decision maker for your employer than it’s time for you to understand that also you will need to negotiate and get the best deals from your suppliers if you want your business to survive this big change.
I just would like to conclude saying that this article is not keen to judge or blame anyone for their vote. I really respect and partly understand some of the reasons behind the many who voted for leaving. Even though I think there has been a lot of disinformation going around and I wanted to deep dive into possible scenarios that everyone of us will have to deal with in our everyday life, even for the ones like me that didn’t vote at all because as foreigners weren’t entitled too.
I hope this will help thinking about your next move and I wish you all the best in this new non-EU United Kingdom.