Finnish retailers are ready for Brexit with planning and stockpiling food

There's still lots of uncertainty about Britain's expected departure from the European Union at the end of October.

File picture of supermarket shelves / Credit: News Now Finland

Some of Finland’s biggest retailers are bracing themselves for Britain’s exit from the European Union at the end of the month, bringing in extra food items in case of supply chain problems caused by a no-deal Brexit.

Brexit is supposed to happen on 31st October, and if Britain leaves the EU without a withdrawal deal in place it could mean disruptions in supply chains for imported food, drinks and household goods; price increases as added taxes and customs fees are passed on to shoppers; or some items disappearing completely if retailers think they’ve become simply too expensive to sell.

Finnish retail giants and importers all have contingency plans in place, but they’ve been in this situation before when the UK was going to leave at the end of March.

“There was this first deadline for Brexit already, and lots of the discussions we had already took place in 2018, so when it comes to this deadline for Brexit we haven’t received any questions from customers so far. We have a plan, and we communicated it” says Lauri Vesala from Unilever Finland.

“From UK to Finland currently I would say that our supply chain is prepared, but when I say prepared it is not only concerning Finland and the Nordics, it is concerning the whole of Europe” Vesala explains.

Unilever is one of the country’s leading importers of goods including toiletries, laundry detergent and fabric conditioner and food as well – with some but not all products coming from the UK.

“We have a plan in place, and there shouldn’t be any problems coming out of Brexit, which I would say is becoming more and more inevitable” Vesala tells News Now Finland, adding that he’s confident in their supply chain and doesn’t envisage any problems for Unilever’s customers or consumers.

Kesko Group meanwhile, which operates one of Finland’s supermarket duopolies, is relying on their importers – including Unilever – to keep things running in the event of a hard Brexit at the end of the month.

A spokesperson says they don’t import items themselves, but they are confident their own suppliers are prepared.

File picture of food items on supermarket shelves / Credit: News Now Finland

S-Group stockpiles food items from UK 

One of the country’s biggest food retailers S-Group has been looking ahead to potential Brexit problems for some time.

With almost 900 stores throughout Finland, S-Group imports some €100 million worth of food, drinks and non-food products from the UK every year for sale in their Alepa, S-Market, Prisma and Sale stores; as well as Stockmann Herkku delicatessen.

On their list of possible scenarios – as best they can predict – a ‘hard Brexit’ with no transition deal which means World Trade Organisation tariffs could be applied to food and drinks coming from Britain to Finland.

But the company is already taking precautions and using the increased storage space at its new Sipoo warehouse facility to store extra stocks of food items from the UK, especially some of the 200 products they get from Britain’s Tesco supermarket.

File picture of Tesco product on sale in S-Group stores / Credit: News Now Finland

“Most of the things we import directly and we have raised our stock levels” says Jari Simolin, S-Group’s Senior Vice President for consumer goods and sourcing.

“This is the second time we did it already, but we don’t know if there will be duty free goods or if there will be WTO duties” he tells News Now Finland.

Among the food items that S-Group has been stockpiling are biscuits, Weetabix breakfast cereal, chocolate, cider and beer.

In total, Simolin estimates the company imports tens of millions of euros worth of products from the UK every year.

He says that while Finnish retailers have been able to plan in advance, it’s not so easy for UK companies.

“I know that in the UK they have challenges because now that Christmas is coming the Britain chains, their volumes are getting quite high and the threat of hard brexit is there with limited warehouse space” says Simolin.