The world is changing and, for better or worse, we are all going to have to adjust. This includes businesses within the hospitality sector. In this article, I will be paying particular attention to the fine dining industry.
As we know, the UK officially left the EU on 1st January of this year, with the EU and UK’s Trade Cooperation Agreement (TCA) taking place on a provisional basis. It seems our initial predictions have come true with many delays in delivering food products to the UK from EU countries, and with many fine dining restaurants using many fresh products in their dishes originating from the EU, we can only hope that supply for these hospitality businesses will improve. Many food products found in the EU are considered necessities in many fine dining restaurants, such as: foie gras, truffle and caviar. Even if you could find these products or any other elsewhere, it is not certain that the quality will be up to par.
Another example would be that of wine, as although many other parts of the world produce fabulous wines such as South Africa and Argentina, it is particularly important to have a wide range of wines to satisfy all palates. According to Accor’s ‘The Magazine’, the top three wine producers in the world as of 2019 were France, Italy and Spain, all producing an incredibly high amount of wine and all garnering the highest ratings. There are, therefore, certainly guests who prefer wines from Europe and as such they should be able to enjoy these with their meals. If I am paying such a large sum of money for a meal where I cannot choose all the details to my heart’s content, what is the point? Thus, if the increased tariffs for wines and other alcoholic beverages were to continue negatively affecting the supply of EU alcohol to the UK, I am certain that demand for fine dining restaurants will not be as high as it could be.
This is especially important for these types of restaurants because, as we know, the devil is in the details.
Since the UK has left the EU’s Customs Union, checks and customs paperwork will apply to all food being imported to the UK. This, as well as the new product specific rules (PSRs) put in place, certainly have a part to play in the recent delays in food delivery that we have been seeing from the EU to the UK.
To highlight the urgency of this matter for fine dining establishments, here are some figures regarding how much the UK currently imports from the EU:
- 40% of food, both fresh and processed, is imported from the EU
- 37% of fruit and 40% of vegetables sold in the UK are imported from the EU
- During the UK’s winter season, approximately 90% of our lettuce, 85% of our tomatoes and 70% of our soft fruit comes from the EU
Origins of Food Consumed in the UK (2019)
*The figures used to create the above table have been taken from gov.uk, it illustrates the origins of food consumed in the UK in 2019. We can see from the table that (aside from the UK) a significant amount of our food products come from the EU; with the remaining countries we import from not necessarily making too much of a difference by comparison.
Due to the perishable nature of fresh fruit and vegetables, inevitable delays in delivery will lead to a reduced shelf-life for food products and ultimately more food waste. This will, in turn, lead to higher prices as well as a lack of choice for consumers. As a result, the demand for fruit and vegetables will likely decrease within the UK.
Tariffs and quotas will not necessarily stop the importation of food goods into the UK due to the TCA’s rules of origin, however the PSRs need to be looked at for each corresponding import. The increased red tape will lead to confusion as well as more time taken to carry out business transactions which should be straightforward. As a result, businesses will face increased costs as well as further delays within their supply chains.
What does this mean for fine dining establishments? Well, it means that they will need to adapt. The first thing that these businesses could do is be more flexible regarding the sources of their products, ensuring they have ‘backup products’(so to speak) in the UK in case matters were to go awry. July will mark the end of the UK’s transitional arrangements, and we are not entirely sure whether the government will keep the TCA in place as it is or decide to adapt it. Either way, businesses must be ready for anything.
Everybody has had an extremely limited time to prepare due to the lack of transparency regarding the entire process. This has led to the aforementioned delays of many food deliveries as well as a lower volume of food products being imported into the UK. Additionally, supermarkets are already suffering due to the resulting shortage of some food items.
Many figures within the hospitality industry have already expressed their dismay at the situation. Stephen Phipson, CEO of MakeUK, stated that “rules of origin” regulations would pose an issue for the UK. Meanwhile, the CEO of the Food and Drink Federation Ian Wright expressed that “the problem is no one had a chance to prepare” and that “it is important to understand that the enforcers are as clueless about some of the provisions in the deal as those operating under them” (and I tend to agree).
In my opinion, had the government offered more transparency regarding what they were planning to do about Brexit, businesses would be more prepared and in a much better position to deal with this change as a result.
As well as the difficulty regarding the delayed and increasingly expensive delivery of food products to the UK from the EU, there is also the issue of finances. As a result of the financial strain many people are currently facing, it is difficult to envision the fine dining scene coming back with a bang instantaneously, apart from those whose finances have been largely unaffected. It is, therefore, hard to believe that fine dining restaurants will see a surge in business right away.
We also cannot be sure as to when the restrictions will officially end; perhaps Mr. Johnson will decide to extend the lockdown roadmap at the very last minute. Until restaurants are allowed to open, business owners will continue to struggle financially. If the restrictions do extend beyond 17th May, perhaps establishments should start thinking outside the box – following the example of Sexy Fish in Mayfair who found a clever loophole with relation to the tier 2 rules last year.
For fine dining establishments to be successful in the long term, they must innovate and give people an incredibly good reason as to why they are charging such exorbitant prices. For more ideas as to how this can be achieved, please take a look at my recent article on innovation and technology within the hospitality industry.
