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Government must act fast to waive UK competition law for food & drink industry to prepare for no deal Brexit, say lawyers

Published on 09 August 2019

  • Government previously waived competition rules for 2012 fuel crisis

  • Business rates for Brexit warehouse space should be addressed

The Government must act fast to waive competition laws to allow the food & drink industry to prepare for a possible “no deal” Brexit, says City-headquartered law firm RPC.

Earlier this week, the Food & Drink Federation called on the Government to relax competition laws, which would allow food and drink businesses to work together to tackle shortages that could occur in the event of a no-deal Brexit. Under normal circumstances, businesses working together in this way could face heavy penalties for anti-competitive behaviour.

The firm says that the Government should promptly put in place measures to implement this relaxation of competition law as it did during the 2012 fuel crisis, as well as rolling out a broader package of support for the food & drink manufacturing and retail industries.

Ciara Cullen, Partner in RPC’s Retail Group, comments: “With a potential no-deal Brexit looming, the Government should be enabling the food & drink industry to help prevent supply shortages affecting consumers.”

Melanie Musgrave, competition lawyer at RPC adds: “The Secretary of State has the power to relax UK competition laws in order to help the industry to plan for shortages in supply. There is precedent for this, including in 2012 when one of her predecessors put measures in place to allow the fuel industry to work together to combat fuel shortages.”

Ciara Cullen, Partner at RPC, comments “It may be that the previous Government avoided tackling this issue in order to downplay the threat of a no deal Brexit, and not worry the public. With no deal now firmly back on the table, there are compelling public policy reasons to waive competition rules. The new Government needs to move quickly.”

“No-deal risks to the food & drink and retail industries come on top of a range of other legislative and regulatory pressures over recent years. Both manufacturers and retailers have for some time been forced to stockpile products/ingredients that might run short and lease additional warehouse space, causing significant additional overhead costs for business. The proposed waiver would be an obvious way for the Government to help.”

“Also, business rates for warehouses are set to rise by 40% in 2021 which will potentially have a further negative knock-on impact on the costs of warehouse space for food & drink companies – tempering that rise would also go some way to helping an industry that is facing unprecedented pressure.”