Brexit: How it is affecting the price of your restaurant’s ingredients

The aftermath of the EU referendum has sent the British restaurant world into the unknown. The sharp fall in the value of the pound has started to raise costs of ingredients imported from overseas.

As Britain consumes 40 per cent of food from outside the UK, Vanessa King looks into the early implications that the post–referendum vote is having on the British dining scene.

Research by accountancy business Moore Stephens has suggested more than 5,500 restaurants could close in the next three years. The Restaurant Group, who own seven giant chains in the U.K, has already decided to close 33 restaurants.

New York-Italian style restaurant Frankie and Benny’s is the most affected, with 14 branches hanging up their chefs hats due to “challenging trading periods.”

Rising Costs

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credit: flickr

The rising costs of pasta, wines and cheeses from Italy has seen many restaurants suffer. According to analysts Brand View, milk prices have risen from 17 pence a litre to as much as 27 pence all over Europe, which has seen the cost of mozzarella and cheddar plunge.

Ingredients price rise (Statistics by MySuperMarket, 23 June 2016 – 31 Jan 2017)

  • Ice cream – 8.2 per cent
  • Flour – 6.1 per cent
  • Vegetables (on average) – 8.1 per cent
  • Beer – 16 per cent
  • Orange juice – 5.5 per cent
  • Ketchup – 3.3 per cent
  • Wine – 13 per cent
  • Sugar – 12 per cent
  • Butter – 9 per cent
  • Fish – 7 per cent

Experts have suggested restaurateurs will have to put meal prices up by five per cent to maintain revenue when buying ingredients from Italy, which runs the risk of losing business.

Who It Has Affected So Far

Celebrity chef Jamie Oliver is to close six of his Jamie’s Italian restaurants across the country, following tough trading after Britain’s decision to leave the EU. The Exeter branch has already closed for business.

Simon Blagden, chief executive of the Jamie Oliver Restaurant Group told The Guardian: “As every restaurateur knows, this is a tough market and because we refuse to compromise on the quality and provenance of our ingredients, it means it is not sustainable to keep all the restaurants open.”

As well as franchised establishments, smaller and independent restaurants have faced post–Brexit concerns.

Olive Tree Brasserie, which has branches in Preston, Lytham St Annes and Chester, imports most of its ingredients from Greece. The weakening pound against the Euro has posed threat to the contemporary Greek restaurant’s budget.

Every year, the managers from each Olive Tree Brasserie branch take a trip to Greece to cherry pick the best spices, vegetables and fish to use in their kitchen, and thrive on using ingredients authentic to the Greek cuisine, including cinnamon and olives.

Preston head chef, Martin Leach, said this is something Olive Tree Brasserie is not willing to compromise on, even though prices are inflating.

 

Martin said: “We pride ourselves on taking extra measures to ensure our customers have a real treat and Greek experience when they visit us. We do not want to ruin this by looking for cheap alternative options; it would really hinder what our restaurant is all about.”

On the subject of prices, Martin was keen to address that Olive Tree Brasserie’s menu prices are not going to increase.

Martin continued: “Negotiation with dealers abroad is taking place to get the best value for money; we would rather do this than punish our customers with increasing prices.”

Michelin-starred chef and restaurateur Jason Atherton has appealed to Theresa May to give post–Brexit details. He told the London Evening Standard that British restaurateurs are “sat waiting like plonkers” for information to be revealed.

Jason, who runs nine dining outlets in the capital and relies on the import of Eastern European fish, said restaurateurs need to start looking at where to buy produce depending on what effects leaving the EU will have.

credit: Jason Atherton

Jason Atherton says he is scared for Britain’s dining scene (Hotelympia)

Despite the prediction that Britain’s dining scene is heading for turmoil, there is good news for restaurants that rely heavily on beef.

Kai Binder, who runs Summat to Ate in Wigan, counts himself and other steakhouse restaurateurs lucky as Britain’s steakhouses have seen a rise in business in the last ten years.

Kai, who has owned the fine dining steakhouse for nine years, said: “I know many restaurant owners who are deeply concerned about if they can survive buying foreign import, now that they are more expensive than ever before.

“Like many steak restaurants, we buy our fillet, rib-eye and sirloin from British farmers, meaning Brexit is not a concern for us.”

The rise of Flaming Grill and Miller & Carter chains across the country have given Britain a real taste for steak, making steakhouses equate to 15 per cent of restaurants in the UK.

The British public’s decision to leave the EU seems to be having diverse implications on the British dining scene. With the threat of 5,500 restaurants closing by 2020, is there a future for restaurants who rely heavily on buying European goods? With the British restaurant field constantly evolving, only time will tell for the nation that eats out more than ever before.

 

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