Thursday, 18 Apr 2024

Brexit latest: Domino’s spends £7million on STOCKPILING pizza TOPPINGS in case of no-deal

The company said in a statement that a “no-deal Brexit carries risk of disruption to raw material supplies”. It comes as the pizza chain told how its net debt had risen from £182.1million to £238million. The company made the announcement on Tuesday in its interim results for 26 weeks ending June 30, 2019.

It meant a rise in debt of £55.9million, compared to its previous results ending July 1, 2018.

The fast food chain said the extra debt had accumulated, in part, due to the company ‘stock building’.

The “£7million increase in inventory levels for Brexit planning” on imported ingredients including tuna, comes as it seems increasingly likely the UK will leave the EU without a deal on October 31.

Domino’s said its stockpiled ingredients include extra tomato sauce which is imported from Portugal.

The Government has started making preparations for a no-deal exit, after Prime Minister Boris Johnson said the UK would leave the bloc with or without a deal.

And the EU has refused to reopen negotiations on the contentious Northern Irish backstop.

A statement from the company said: “A potential no-deal Brexit carries the increased risk of disruption to raw material supplies into the UK and foreign exchange volatility which could increase food costs.”

Last week, Domino’s chief executive David Wild announced he would leave the company after five years leading the chain.

Store owners have been demanding a bigger slice of the company’s profits in response to the pressure to open more stores.

Franchise owners, many of whom have mini-empires of multiple sites, say profitability has declined as costs rise.

Competition from the likes of Deliveroo and Just Eat has also affected profits – leading investors to be concerned for the group’s future.

Shares have declined by more than 25 per cent since this time last year.

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In an announcement this week, the group said it expects the dispute to last into 2020 as it tries to find a solution. (16)

Meanwhile, a leaked Government report suggested there could be widespread food shortage and school closures in the event of a no-deal.

The report was written by Lord Agnew, Parliamentary Under-Secretary of State for the School System.

The document claimed panic buying could increase food prices by up to 20 percent, whilst exams could be disrupted.

Referring to school food the document warned that “communications in this area could spark undue alarm or panic food buying among the general public.”

It read: “Warehousing and stockpiling capacity will be more limited in the pre-Xmas period.

“The department has limited levers to address these risks.

“We are heavily dependent on the actions of major suppliers and other government departments to ensure continued provision.”

Sajid Javid said the figure will include £1.1billion for immediate spending on extra border guards, stockpiling vital medicines and a massive publicity blitz aimed at households and businesses.

A further £1billion reserve fund will be earmarked to cover emergency contingencies as the Brexit deadline approaches.

The Chancellor said: “With 92 days until the UK leaves the European Union it’s vital that we intensify our planning to ensure we are ready.

“We want to get a good deal that abolishes the anti-democratic backstop.

“But if we can’t get a good deal, we’ll have to leave without one. This additional £2.1 billion will ensure we are ready to leave on 31 October – deal or no deal.”

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