‘No deal’ Brexit risks disaster for food and drink industry, warn MPs

90% of revenue from EU food and drink sales comes from within the single market. [RomeoLu/Shutterstock]

A no-deal Brexit would be ‘disastrous’ for the UK food and drink industry and ‘must be avoided at all costs’, UK MPs on the Business, Energy and Industrial Strategy (BEIS) Committee, said in a report published on Sunday (22 April).

The Committee chair, Rachel Reeves, a Labour MP, said that “the success of the industry has been highly dependent on participating in the Single Market and Customs Union.”

Ministers should seek “continued regulatory, standards, and trading alignment with the EU,” she added.

On Thursday, MPs will debate and vote again on whether the UK should leave the EU Customs Union after the House of Lords voted last week to insert an amendment on Customs Union membership into the government’s EU withdrawal bill. The prospect of a government U-turn on Customs Union membership appears to have increased in recent days. However, a number of Conservative Brexiteers warning Theresa May that she could face a leadership challenge if she backtracks on the issue.

The opposition Labour, Scottish Nationalist and Liberal Democrat parties are opposed to the UK leaving the Customs Union, along with a minority of MPs from the governing Conservatives.

For their part, the MPs report found that most industry stakeholders supported the UK continuing its membership of the European Food Safety Authority (EFSA), which regulates the sector, after Brexit.

The food and drink industry is worth £28.8 billion to the UK economy and employing hundreds of thousands of people throughout the country.

Meanwhile, 24% of the food and drink’s workforce was made up of migrants from the European Economic Area (EEA) in 2016, according to the UK’s Migration Advisory Committee.

Most of the UK food and drink industry want to stick to EU regulation, the report found. MPs said that EU rules on geographical indicators, high food standards and harmonised food labelling should be retained.

Food and drink giants Diageo and Ferrero UK, also warned that non-tariff barriers, in the form of border delays and increased bureaucracy, would have an adverse impact on UK competitiveness. Diageo representatives told the Committee that a 15-minute wait for each truck at the border between Ireland and the UK would cost £1.3 million per year to their company alone.

It added that the government should prioritise the roll-over of existing and forthcoming EU trade agreements with third countries, adding that the opportunities to the UK of cutting new trade pacts outside the EU were “both relatively slight and distinctly uncertain”.

 

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