Greencore chief warns of rising prices from Brexit

When the daily lunchtime rush comes on in Marks and Spencer, Tesco, Sainsbury's and Morrisons stores around Britain, it is likely the sandwich or wrap workers take from the chilled shelves will have originated in a Greencore production facility.

The company – which rose from the privatisation of Irish Sugar – describes itself as the world's biggest sandwich maker and is the largest Irish firm in Britain, according to chief executive Patrick Coveney.

With 17 manufacturing sites and 20 distribution depots, the company employs 12,000 in the UK, and Mr Coveney has a very clear view on what the future will hold should Britain vote to leave the EU.

"My view is the implications for the food industry in Britain and for food manufacturers like us of Britain leaving Europe would be bad. And not marginally bad – very bad," said Mr Coveney, whose brother Simon is Minister for Agriculture.

For consumers this would likely materialise as a rise in the price of the wraps, rolls and sushi sets which make up Greencore’s products. According to Mr Coveney, prices would be affected both by a rise in the cost of ingredients and by staffing problems.

About half of the raw ingredients which go into the products are sourced from other EU countries. Any change in trading conditions which makes it more difficult to source those raw materials will force up the price of food, he argued.

“It is going to drive up our cost of goods, which will subsequently feed into food pricing.”

Flow of workers

Just over one in three staff working for the company is an EU national from outside the UK. Changes in immigration laws which would make the flow of workers into Britain more difficult would result in a knock-on cost in operating Greencore’s factories, he said.

“It is going to make it much more difficult to run farms in Britain and much more difficult to run retailers in Britain.

“The truth is that people don’t quite know what trading deals will or won’t be put in place but it is hard to see how the environment could be better than it is at the moment, having a free trade arrangement collectively with the UK and the EU.

"It is inconceivable it could be better, and I have not heard even the most vociferous arguer of Brexit argue that the trade deals within the EU could be better. Many are arguing that they will be the same but I am not hearing anyone argue that they will be better."

Pound weakening

Mr Coveney cautioned there is also the possibility of the pound weakening and a potential reticence for foreign investment in the UK as well as political instability, including a second Scottish referendum on leaving the UK. Those on the side of Brexit have argued an Australia-style system should be put in place where only people with the skills needed should be allowed work in the UK. But Mr Coveney argues it is multiculturalism and open borders that has fuelled economic growth.

“Where we have Polish or Czech or Hungarian communities working in some of our facilities, we are not finding any evidence of that being at the expense of UK nationals who want to work.

“In parts of the UK there are very large migrant communities who have been here working and have been for a very long time.

“Broadly the demography of our workforce reflects the demography of the areas in which our plants are located.”