No-deal Brexit will lead to 'severe disruption' and food shortages, warns Twinings and Primark owner

No-deal Brexit will have 'terrible consequences', ABF exec says

Associated British Foods, the owner of Primark and Twinings among other household brands, has warned of "severe disruption and terrible consequences" if the UK leaves the EU with no deal in place.

The company’s finance director John Bason said there was a “real possibility of food shortages” in the event of a cliff-edge Brexit.

“A Brexit where there is no agreement would be very disruptive and people need to understand that and the effect it would have on food,” Mr Bason told Bloomberg.

His remarks followed ABF’s latest trading update in which the company reported that Primark sales were set to rise by 4 per cent in the first half of the year.

The group is expecting to record growth across all businesses, including brands such as Ryvita, Dorset Cereals and Ovaltine, except its sugar arm, which has been in decline for years.

ABF also said Primark is performing strongly in the US, “driven by excellent trading at our recently opened Brooklyn store”.

Graham Spooner, investment research analyst at The Share Centre, said: “These results follow a similar pattern seen in previous updates with reduction in sugar revenues, steady growth at its other divisions and expectations for a 4 per cent rise in sales at Primark over the first half.

“The focus on the group continues to be on the expansion of Primark into the US and though it is at an early stage investors will welcome promising early signs.”

Shares in ABF were down 1.5 per cent by mid-afternoon Monday.