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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  J Sainsbury plc    SBRY   GB00B019KW72

J SAINSBURY PLC

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J Sainsbury : Getting lettuce into Britain - Spanish farmers baulk at no-deal Brexit

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10/10/2019 | 06:17am EDT
FILE PHOTO: A farmer drives a tractor through a field of lettuce ready to be collected near Pulpi

MADRID (Reuters) - At this time of year, Juan Colomina is preparing for the start of the harvest of thousands of tonnes of fruit and vegetables grown under plastic in southern Spain and exported to the world.

This year he has an added complication - trying to work out which forms are needed to get crops of fresh produce like lettuce and tomatoes through French and British customs in the event that Britain leaves the European Union without a withdrawal agreement.

"Our peak season starts now," said Colomina, head of Coexphal, an association representing more than 9,000 farmers in Almeria, southern Spain, who send dozens of trucks daily to Britain laden with everything from broccoli to watermelons.

"We don't know exactly what kind of documentation we'll need until we know what kind of Brexit will happen," he added. With just three weeks before Britain is due to leave the world's biggest trading bloc, it is still unclear on what terms it will leave or indeed whether it will become the first sovereign state to depart the European project.

It's a big unknown causing headaches in farms across Spain, Britain's biggest foreign supplier of fruit and vegetables.

Britain's putative Oct. 31 exit date from the EU comes at the height of Spain's export season when the end of the British summer heralds imported tomatoes and lettuce grown in huge industrial greenhouses in the year-round Mediterranean sun.

Growers and exporters will have to prepare paperwork to present at borders to smooth the passage of trucks and prevent delays that could turn perishable loads to garbage.

"I can't believe administrations will be so blundering as to say it's all change from one day to the next because no-one is prepared," said Francisco Sanchez, manager of growers' association Onubafruit which represents over 1,000 farmers.

Nearly a third of Onubafruit's production - mostly strawberries, raspberries and blueberries - is exported to Britain, selling to supermarket groups like market leader Tesco and No. 2 Sainsbury's.

Both growers and supermarkets fear a change in status of Britain overnight from EU member to default terms of the World Trade Organization (WTO) could lead to huge queues at French ports with delays and millions of euros in losses.

The EU accounted for nearly two-thirds of Britain's imports of fruit and vegetables last year, according to the Office of National Statistics. Spain was the biggest foreign supplier of fresh produce, followed by the Netherlands.

In turn, Britain is an important market for Spanish produce - its third biggest - with fruit and vegetable exports worth nearly two billion euros last year.

If Britain leaves without a deal, trucks carrying produce from the trading bloc will have to have present customs, sanitary and quality control documents, Spain's Acting Minister of Agriculture, Fisheries and Food, Luis Planas, told Reuters.

Spain had done its preparation, he said, by setting up a process to present documents electronically and working alongside France which tested out its 'smart' border to speed entry into Britain last month.

"Our exporters want to sell," the minister said.

However, many producers do not have these documents and processes in place, exporters and producers say.

Many do not want to invest in software needed to present the documents electronically in case the no-deal scenario does not happen, said Jose Maria Pozancos, director of Fepex, the Spanish association of producers and exporters of fruit and vegetables.

Growers say they speak daily to British supermarkets, but are receiving no guidance from them as to what to expect.

The British government has said that in the event of a no-deal Brexit, its priority is to keep goods moving and avoid delays at the border without compromising security.

It has indicated it would minimise checks or simply waive through lorries from EU countries.

"The answer to all these questions is 'it depends' because nobody knows what the specifics will be," said Dave Lewis, chief executive of British supermarket chain Tesco.

Tesco was working closely with producers, Lewis told Reuters.

Sainsbury's declined to comment on specifics. However, it has repeatedly warned of the consequences of a no-deal Brexit.

"There will be an impact if there is a hard-edged Brexit on suppliers of certain types of short-life fresh foods, not least things like lettuces, citrus fruits, soft fruits and those kind of things which come from southern Europe at this time of year," Chief Executive Mike Coupe said.

(Reporting By Sonya Dowsett; Additional reporting by James Davey in London, Editing by Angus MacSwan)

By Sonya Dowsett

Stocks mentioned in the article
ChangeLast1st jan.
J SAINSBURY PLC -1.23% 216.1 Delayed Quote.-18.42%
TESCO PLC 0.58% 244 Delayed Quote.28.35%
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Sales 2020 29 040 M
EBIT 2020 1 009 M
Net income 2020 407 M
Debt 2020 1 065 M
Yield 2020 4,84%
P/E ratio 2020 12,7x
P/E ratio 2021 11,9x
EV / Sales2020 0,20x
EV / Sales2021 0,19x
Capitalization 4 767 M
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Average target price 233,50  GBp
Last Close Price 216,20  GBp
Spread / Highest target 29,5%
Spread / Average Target 8,00%
Spread / Lowest Target -16,7%
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Managers
NameTitle
Michael Andrew Coupe Chief Executive Officer & Executive Director
Martin A. Scicluna Chairman
Simon John Roberts Director-Retail & Operations
Kevin O'Byrne Chief Financial Officer & Director
Richard Philip Newsome Director-Digital & Technology
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