Europe’s food and drink industry has urged the EU to rigorously enforce the bloc’s single market rules, and warned that Brexit poses a real threat to the future of many of its businesses.
The 289,000 companies in the EU food chain generate an annual turnover of more than €1 trillion and provide some 4.2 million jobs, making food and drink the bloc’s biggest manufacturing sector.
The industry grew by 3.4% from 2012-2013 and is on track to meet its target of 2.5-3.5% annual growth by 2025.
But in a new report, FoodDrinkEurope, the trade association representing the sector at EU level, has warned policymakers that barriers to the single market, which it describes as “one of the EU’s greatest achievements”, as well as the uncertainty surrounding the UK’s withdrawal from the EU, have put the industry’s growth at risk.
In its report, FoodDrinkEurope warned that differing interpretations of EU law by different countries create unnecessary problems for companies and urged the European Commission to produce a comprehensive single market strategy to ensure that rules are enforced correctly and coherently across the bloc.
Some 90% of the industry’s turnover is generated within the EU single market.
Put business needs over political games
Another threat the industry association identified to its growth targets is the UK’s decision to leave the European Union and the single market.
The trade association pointed out that once outside the bloc, the UK will be the EU’s largest trading partner in food and drinks and called on policymakers to ensure transitional agreements are in place to offer more certainty to businesses.
The food and drinks supply chains are very closely integrated and any post-Brexit border controls could have a disastrous impact on some sectors. the report states.
On the island of Ireland, for example, the dairy sector operates as one, with milk often crossing the North-South border several times between the farm and the point of sale. The industry will need time to adapt to the new circumstances after Brexit and FoodDrinkEurope warned that the duration of any transitional agreement “should be determined by business needs to get ready for the new EU27-UK trade regime and not by political requirements”.
The final agreement, the report states, should provide the ambition and balance that businesses need to remain competitive.