Domino’s is stockpiling pizza ingredients to protect against a disorderly Brexit
Pizza chain Domino’s has spent £7 million ($8.5 million) to stockpile imported ingredients that might not be available if Britain crashes out of the European Union.
The UK arm of the American fast food company said in an earnings statement on Tuesday that a disorderly Brexit “carries the increased risk of disruption to raw material supplies.”
The company imports about a third of its supplies from outside Britain including tomato sauce, frozen chicken, pineapple and tuna.
Business groups representing the food and beverage industry have cautioned that that shortages would be caused by disruption to supply chains and long lines at the border.
Many companies have been stockpiling for months. Some have even warned that Britain was running out of frozen and chilled storage to hold the excess supplies.
McDonald’s, KFC and Pret a Manger joined with UK supermarkets earlier this year to warn of “significant” disruptions to their supply chains from a disorderly break.
Domino’s said Tuesday that it had spent £7 million ($8.5 million) to “implemented a series of measures to minimize the impact of supply chain disruption” because “the probability of this risk has increased.”
“We expect the increased inventory level related to Brexit to be maintained into 2020,” the company added. Around two thirds of the produce it relies upon, including flour and cheese, originate in Britain.
The British government has been working on preparedness plans in an attempt to minimize shortages following a disorderly Brexit, and has sought to assuage public fears of disruption.
Concerns have centered on the impact on supplies of medicine and clinical products, around 75% and 50% of which respectively come from or via the European Union.
Last month, the British Department of Health and Social Care wrote to suppliers suggesting that they stockpile six weeks’ worth of inventory beyond typical levels.