It could mean selling more jam, tea and British goods overseas
At the time of writing (20th November 2018), we’re still no closer to leaving the EU with a concrete deal as the UK Prime Minister, Theresa May, is still battling to get her deal agreed by the UK Parliament and the EU.
Research published in September by Barclays showed that a no-deal Brexit model would create an average tariff of 27 per cent on food and drink supply chains, and food retailers can expect to pay an extra £9.3 billion a year.
Last year the UK imported £48 billion worth of food and drink from the EU, which is around 40 per cent of the total UK market. Of these imports, 71 per cent entered the UK free of customs duties and other trade costs.
Ian Gilmartin, head of retail at Barclays, said: “The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK. For the good of both UK business and consumers, the potential impact on our producers and grocery retailers should be front and centre of Brexit negotiations.”
However, it might not be all doom and gloom…
Ahead of Article 50 being triggered last year, the Department for Environment, Food and Rural Affairs launched their ‘International Action Plan for Food and Drink’.
It identified nine markets across 18 countries with the best potential for selling British produce. This includes Japan where the people have developed a liking for British afternoon tea and roast beef, Mexico who have seen an increased demand for whisky and gin, and in Australia and New Zealand popularity of British beer and cider is on the rise.
The project aims to “raise the ambitions” of small British producers to help them sell their produce to different corners of the globe…but whether or not an increase in exports to non-EU countries can make a dent against that extra £9.3 billion a year is another matter.
Whatever is agreed for the 29th March 2019, it is clear that the food and drinks industry cannot rely on a “status quo”. Regardless of the Brexit outcome, investment is needed to improve productivity, efficiency and to stimulate demand. Waiting to know for certain may in itself be a risky strategy!