Agri-food industries highlight risks of hard Brexit, demand clarity

Britain's wheat sector would lose out under WTO tariffs between the UK and the EU27. [SergBob/Shutterstock]

The EU’s food and drink industry has joined forces with farmers and agri-food traders to call for a smooth Brexit transition and highlight the damage a cliff-edge EU exit would do to the bloc’s food chain.

Operators in the food chain face “unprecedented challenges” after Brexit, according to Food Drink Europe, the organisation representing food producers at EU level, COPA-COGECA, the union of European farmers and agri-cooperatives, and CELCAA, the group representing traders in agricultural commodities.

The food and drink industry is the EU’s biggest manufacturing sector and trade in agri-food products accounts for 11% of all trade flows between the UK and the EU27. Free movement means the sector is highly integrated across EU borders, with production and processing often occurring in different countries.

Nearly half of the value added to UK agricultural exports is generated after they leave the country, according to the three organisations, which stressed the importance of keeping tariff and non-tariff barriers to trade as low as possible and above all providing predictability.

Britain currently imports about 40% of its food and its biggest market for both imports and exports of food products is the EU.

“After Brexit, movements of goods between the UK and the EU27 will no longer be regarded as intra-EU transactions,” the organisations said in a joint memo. “Without explicit agreement, movements of agri-food and drink products in both directions would be subject to the usual formalities with third countries.”

Under a WTO tariff regime, many British sectors, such as sheep farming, would become unprofitable overnight, while the EU’s dairy and beef farmers would also take a big hit.

The food chain organisations went on to say that importers or exporters could face tariffs of up to 86% if the UK leaves the EU without a trade deal. Not to mention the additional costs associated with technical barriers to trade such as customs declarations, which would increase waste in sensitive food sectors unless special agreements were made.

UK links trade to post-Brexit Irish border plans

The UK will set out its proposals for the Irish border after Brexit today (16 August), seeking to use the issue to pressure the European Union into starting early trade negotiations.

Ireland exposed

“We are worried that uncertainty still prevails in the Brexit negotiations. The sooner we have a clear framework, the better for everyone, on both sides of the Channel,” a spokesperson for Food Drink Europe told EURACTIV.com.

The three organisations highlighted the risk a no-deal scenario with no transition period would pose to Ireland, where more than half of all cross-border flows are made up of food and drink. They called for “practical and inventive solutions” to avoid the introduction of physical infrastructure along the Northern Irish border, the UK’s only land border with the EU.

Hard border could spell the end for Northern Ireland’s dairy processors

Controls on the Irish border could make the island’s dairy industry “unworkable”, while tariffs could force Northern Irish milk processors out of business altogether, the sector has warned.

“We cannot have radical changes from one day to the next, this would be simply unworkable for all. Hence the need for transition periods,” the spokesperson added.

Around 43% of Irish agricultural exports go to the UK, while 65% of Northern Irish agri-food exports go south over the border. Some sectors, such as the dairy sector, are so intertwined that products may cross the border four or five times between the farm and the fork.

As for how long the transition period should last, the food chain actors said it “should be determined by the essential needs of business and frontier authorities […] and not arbitrarily decided by political requirements”.

Brexit is an 'existential threat' to Irish beef

Uncertainty surrounding Northern Ireland’s border in the Brexit negotiations is taking a toll on Irish farmers, posing an “existential threat to the sector”, sources in Brussels told EURACTIV.com.

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FoodDrinkEurope

FoodDrinkEurope is the organisation of Europe’s food and drink industry. Our supply and manufacturing chains are largely integrated across the EU, whether for small or large businesses, and so is the intra-EU trade. The free circulation of goods guaranteed by the Single Market is essential to a competitive food industry, to uphold its 4.2 million jobs and its growth ambition.

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