Gov report reveals food and drink sector to be worse off after Brexit

Monday, 12th March 2018, 8:36 am
Updated Monday, 12th March 2018, 9:00 am

Food and drink prices look set to rise under every possible Brexit trade agreement the EU Exit Analysis, the Cross Whitehall Briefing report has revealed.

Parts of the report were initially leaked six weeks ago, however, the full report was published last week by the Brexit select committee.

The report found that under a European Economic Area trade agreement, a standard Free Trade Agreement and a World Trade Organisation trade agreement food and drink prices could rise by approximately 6 per cent to 17 per cent.

The report adds that as there is no precedent for estimating the increase to trade barriers from leaving the EU, the price rises are estimated on the cost of joining one.

As a result traditional imports from the EU like wine, cheese, meat and fruit could all see a stark rise in price after Brexit.

Speaking in response to the publication today by the Exiting the EU Select Committee of the Government's Brexit Analysis, Food and Drink Federation Corporate Affairs Director Tim Rycroft said: “It is deeply alarming to see the financial impact of any bad Brexit deal on UK food and drink set out in such stark terms.

“The findings show that food and drink would be worse off in every single scenario modelled – faring the worst under WTO terms.

He added: “To maintain our competitiveness and continue to provide consumers with the choice, range and quality they enjoy and expect, Government must redouble its efforts to secure a deep and comprehensive trade deal which protects our access to markets and provides regulatory stability.”

Barriers

The report also estimated how the domestic food and drink sector likely to face the largest effects of Brexit would be on retail, cars, chemicals and manufacturing.

This would come as a result of different trade barriers introduced on sectors by exiting the EU, their relative share of trade with the EU and the trade intensity of their inputs.

A FDF spokesperson added: “The impact assessment demonstrates the scale of the challenge faced by our industry. It indicates that a no-deal scenario would lead to additional costs to food and drink manufacturers averaging 17 per cent as a result of new technical and regulatory barriers to trade.

"That is before the impact of tariffs is taken into account, which for food and drink is significantly higher than for other goods, with peaks of more than 100 per cent on many products.

“The success of the UK’s largest manufacturing sector is inextricably linked to our ability to import and export raw materials and finished goods across borders. The overwhelming majority of the UK’s trade in food and soft drink is with the EU – more than 70 per cent of exports and imports.”

“That is why FDF has long argued for tariff-free, barrier-free frictionless trade which as a matter of priority avoids disruption to the food and drink supply chain. Our industry relies upon unimpeded movements of perishable ingredients and sales of limited shelf life consumer products to provide consumers with a fantastic array of safe, affordable and nutritious food and drink every day.”

A UK Government spokesperson added: "Leaving the EU gives us an opportunity to secure ambitious free trade deals while supporting our farmers and producers to grow and sell more great British food.

"As the Prime Minister has made clear, we are seeking the broadest and deepest possible partnership with the EU – covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today. This analysis was incomplete and provisional work and does not access our preferred scenario."