03 Sep ‘No-deal’ Brexit could destroy UK’s food and drink opportunities
Since the referendum in 2016 in which United Kingdom citizens voted for the sovereign country to leave the European Union, there has been much discussion about what Britain’s exit from the EU (‘Brexit’) could mean for trade and industry. How might Brexit affect the UK’s food and drink opportunities, for example? The picture doesn’t look too rosy for a ‘no-deal’ solution:
Risk to food and drink supply chains forcing businesses to source alternative ingredients
Since Theresa May’s Draft Withdrawal Agreement was voted down by the House of Commons, leading to May’s resignation as Prime Minister, there has been continued uncertainty about what a ‘no-deal’ Brexit (in which the UK would leave the EU with no ‘divorce agreement’) will mean. One concern is the risk to supply chains.
Current EU member state benefits enable food and drink businesses to source ingredients from neighbouring countries easily. A UK Food and Drink Federation (FDF) spokesperson has outlined how food businesses have already begun sourcing alternative ingredients in case of trade interruption due to a no-deal Brexit.
No-deal Brexit requires all links in supply chains to be prepared
Due to the far-reaching impact a no-deal Brexit would have, in trade agreements and other matters of policy affecting businesses, many food and drink companies are vulnerable to links in their supply chains being unprepared. While some businesses have prepared in advance for the possibility of a no-deal Brexit, key suppliers might not all be equally prepared to ensure their operations continue running smoothly post-Brexit.
Concerns over price surges
One of the big concerns regarding a no-deal Brexit is the possibility of a surge in food prices. Reduced competition and ingredient availability could result in rising costs for food and drink manufacturers. This could be compounded by some businesses stockpiling resources in preparation for Brexit, potentially making common ingredients scarcer and thus costlier in the process.
Concern over food and drink industry jobs
A no-deal Brexit would also potentially impact the workforce in the food and drink industry in the UK, due to residency agreements between the UK and other EU member states changing. Businesses are concerned about the implications of a no-deal Brexit for their workforces.
FDF’s chief executive criticizes Boris Johnson’s ‘do-or-die’ approach
The incumbent Prime Minister of the UK, Boris Johnson, has been warned of the risks of a no-deal Brexit by the chief executive of the Food and Drink Federation, Ian Wright. Wright has said that the food and drink manufacturing sector is ‘critical’ in ‘national infrastructure’, saying, ‘A no-deal Brexit … will inflict serious and – in some cases mortal – damage on UK food and drink. Prices will rise, there will be significant shortages of some products, and disruption for shoppers and consumers will be far-reaching.’
Trade between Northern Ireland and the Republic of Ireland a foreseeable issue
One of the foreseeable issues in a no-deal Brexit would be how to renegotiate trade between Northern Ireland (which remains one of the constituencies of the United Kingdom) and the Republic of Ireland, the independent country within UK territory that will remain within the EU post-Brexit.
According to an article for BBC News by John Campbell, a no-deal Brexit could put 40, 000 jobs at risk in Northern Ireland, particularly in the food and agriculture industry. Because both Northern Ireland and the Republic of Ireland would no longer be subject to the same EU trade zone agreements, EU tariffs and other barriers could mean that Northern Ireland businesses are no longer able to export easily to Irish markets.
President of the UK National Farmer’s Union weighs in
The president of the National Farmers’ Union Minette Batters said of a no-deal Brexit that it would ‘be a catastrophe for British farming’, adding that no deal is ‘the stuff of nightmares’. According to Batters, high export tariffs could greatly reduce the market for British food and drink produce and could result in farms up and down Britain being ‘decimated’.
Detrimental impact on fresh fruit and vegetable availability for consumers
In an article titled ‘No-deal Brexit: 10 ways it could affect you’, BBC News outlines further ways a no-deal Brexit could affect British consumers. According to the article, almost 30% of food in the UK currently comes from the EU, and fresh vegetables and fruit could be among those products that become scarcer and more expensive.
One issue raised, however, is that panic buying by consumers could further exacerbate the problem by causing supermarkets to run out of stock. Although some retailers have stockpiled non-perishable EU-produced items, this is not a viable approach for fresh fruit and vegetables due to their shorter shelf-life.
UK government issues advice to food and drink sector businesses
The UK government has put together a guide for businesses in the food and drink sector covering several areas that could be affected by a no-deal Brexit. The guide covers importing and exporting, food and organic produce labelling, employees, data protection and marketing standards and more. This list shows that Brexit will affect many areas of food and drink business operation, from logistics down to product packaging and label information.
The government has also put together a step-by-step tool for businesses, to help determine what preparations they need to make in the event of a no-deal Brexit.
Where to from here for the UK’s food and drink sector?
It’s clear from the Food and Drink Federation’s chief executive’s words and the words of the president of the National Farmer’s Union that many are not happy about the possible ramifications of a no-deal Brexit for the UK. It now remains to be seen whether Johnson’s government will proceed with a ‘do-or-die’ style Brexit and stick to the October 31st deadline, or whether there will be more last-minute developments that give the UK’s food and drink sector some reprieve.