Brexit Voices: Nobody arguing trade will be better if UK leaves EU

Greencore chief Patrick Coveney fears constitutional and political uncertainty may follow an EU departure

Greencore chief executive Patrick Coveney fears political, constitutional and financial uncertainty would follow a decision by the UK to leave the EU. Photograph: Cyril Byrne/The Irish Times.

Greencore chief executive Patrick Coveney fears political, constitutional and financial uncertainty would follow a decision by the UK to leave the EU. Photograph: Cyril Byrne/The Irish Times.

 

When the daily lunchtime rush hits in supermarkets around Britain, it is likely that the sandwich or wrap a customer picks up from the chill cabinet in Marks & Spencer, Tesco, Sainsbury’s or Morrisons will have originated in a Greencore production facility.

Calling itself the world’s largest sandwich maker, the company which rose from the privatisation of Irish Sugar is the largest Irish firm in Britain, according to chief executive Patrick Coveney.

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

“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.”

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. Prices would be affected in two ways according to Coveney - from an anticipated rise in the cost of ingredients and from 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 harder to source these will force up prices . “It is going to drive up our cost of goods which will subsequently feed into food pricing so I think that would be bad.”

Knock-on costs

Just over one in every 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 their 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 so you will find a pretty significant increase we think in the total cost of goods from… the availability and cost of raw materials to availability and cost of staffing all the different people who work in the UK food industry.

“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.”

Investment

In the case of Britain leaving, Coveney says 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.

“Between the impact on the availability of materials, cost and availability of labour, the consequences of a dramatically weakening sterling and the constitutional uncertainty and political uncertainty that follows, they are all bad.”

Those on the side of Britain exiting have argued that an Australian-style system should be put in place where just those with the skills needed should be allowed work in the UK. It is a history of multiculturalism and open borders that has fuelled economic growth, Coveney argues.

“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. We are constantly recruiting people, we are building a workforce all of the time.

“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.”