September 19, 2021

UK food and drink sector reacts with cautious optimism to post-Brexit deal

Brexit

The UK food and drink industry has reacted with both with relief and a fair amount of caution as news of the British government’s proposed Brexit deal with the EU continues to filter through.

Commenting on today’s news that a trade agreement with the EU has been concluded and will be in place before 31st December, FDF chief executive, Ian Wright CBE, said: “UK food and drink is breathing a sigh of relief that we have a deal but we will hold the celebrations until we have scrutinised the detail. We must first answer key questions about which individual sectors of the industry will be unable to access the EU market without facing tariffs under the agreed rules of origin.

“We welcome the prospect of a more constructive approach to enforcing new rules, on both sides of the border. We hope for a much more collaborative relationship between London and member states with the minimisation of disruption at the border due to new trade frictions introduced as a priority.

“The Prime Minister promised UK businesses over a year of transition in which to adapt to a new set of rules. He has delivered us four working days. Food and drink manufacturers will do their best to keep food flowing. However, this week’s chaos at Dover and the last gasp nature of this deal means that there will be significant disruption to supply and some prices will rise. Disappointed shoppers and consumers will rightly ask why a deal had to take so long.” 

Reacting to news of a Brexit deal being reached, James Withers, Chief Executive of Scotland Food & Drink, said: “A deal has emerged ridiculously late in the day and there is a huge amount of detail to assess.  However, this will ensure we avoid crippling tariffs of up to 80% on some of our key food exports. That is good news. 

“However, before Ministers start popping champagne corks, they need to be alive to the danger of more disruption at our ports in just a few days’ time. 

“The tariff threat is averted but we remain hugely concerned at the wave of new export checks about to be introduced. For months now we have been warning the UK Government of disruption and a lack of readiness. We have lost a transition period to a pandemic and it is only with a week to go that we now know what we are transitioning to.

“We would urge the UK Government to now seek a grace period on the introduction of new export checks on 1st January. The UK is already planning to waive checks on most imports from the EU and on some products moving between Northern Ireland and the GB mainland. We desperately need the same for our exports to the continent. Otherwise I fear the scenes we have witnessed of horrendous border disruption over recent days could be repeated, especially with new Covid testing now also required.

“Businesses cannot afford more disruption after a nightmare year and a Christmas export trade that has been ruined for many. If they face more losses through no fault of their own, UK Government will have to be ready with financial aid.

“With four working days until the end of the year, there are around 2000 pages of detail to analyse. There is already grim news emerging for seed potato exports to Europe, important to Scotland’s farmers. They now look blocked from 1st January. The phrase ‘free trade’ certainly won’t apply to them.”

Business group Logistics UK, meanwhile, has reacted with optimism to the Free Trade Agreement (FTA) reached today (24th December 2020) between the UK and EU but has cautioned that there is still much to be done to protect the nation’s supply chains, and the economy as a whole.

“A deal is great news for the UK economy,” says Elizabeth de Jong, the group’s policy director, “since it removes the risk of tariffs being placed on almost every item imported from the EU, which would have raised prices and slowed the rate of economic growth.  We are still absorbing all the details, but it looks as though HGVs will continue to have access to the EU market, and aircraft will still be permitted to fly to and from the EU, which safeguards the UK’s highly interconnected supply chains and protects the jobs of those charged with keeping the country stocked with the goods it needs.

“Meanwhile, Logistics UK is urging traders to continue to get ready for new trading conditions as they were before, as the new trading relationship will still require many of the same preparations, not least the introduction of customs declarations and additional checks on food and livestock.  Logistics UK is advising traders not leave paperwork to the last minute, or ignore it, as this will cause delays to journeys.”