Brexit has driven up cost of catering equipment parts by ‘10% to 15%’, says manufacturer

Mike Butt, managing director

British catering equipment manufacturer GDPA says it has seen a spike in component prices of between 10% and 15% following last week’s EU referendum result.

GDPA, which owns brands such as Burco and Lec, and operates a huge manufacturing facility in Prescot, Merseyside, is adamant it won’t have to raise prices as a result of the increase, which is down to the fall in the value of the pound, but said it was a challenge that many British-based manufacturers would need to face head-on in the wake of the Brexit vote.

Mike Butt, who recently took over as managing director of GDPA, told FEJ that while the economic uncertainty was unhelpful for business, the reality is you can only make decisions based on facts.

“I think the only known thing at the moment is the devaluation of the pound and that is going to be an issue for all British manufacturing businesses that either import parts internationally, as most British manufacturing businesses do, and against cheaper importation from foreign businesses. That is going to challenge margins moving forward; potentially it will challenge user pricing moving forward. I think it just depends on how long it lasts and whether it stabilises. The longer the uncertainty goes on, the more risk we have got of the pound devaluing.”

Mr Butt said that GDPA sources “quite a few” of the parts that it uses to assemble its appliances from Europe and said that between last Friday’s result and Monday there had been an “automatic uplift of 10% or 15%” in pricing after the pound plummeted.

“We have got to work hard now to try and take that out of the supply chain and improve our efficiencies because the last thing we want to be doing is [increasing prices] – it is always easy to ride on the back of these things, but at the end of the day I think people remember the businesses that have worked hard to try and mitigate these costs as much as possible.”

The former Dawson Foodservice man, who has also just joined the CESA council, said the business has some short-term leeway on pricing as it forward-forecasts on currency, but added that its main priority was ensuring it does not make any knee-jerk reactions until the picture is clearer. “I think from a business point of view we have just got to make sure that we keep stability in the business and that we keep doing the right things,” he said.

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