FDBusiness.com

“The political dimension means that common sense may not always prevail,” said David Thomson (pictured above), CEO of Food and Drink Federation Scotland, about the current Brexit negotiations and their impact on the food and drink industry in Scotland and the UK. He stressed the importance of heightening the profile of the food and drink industry in the UK in order to ensure that the British Government takes into account its key contribution to the overall economy and its vulnerability to an unfavourable Brexit outcome.

The UK and Scottish food and drink industries both need continued access to EU workers and continuity regarding food regulation. Some 400,000 people are currently employed in food manufacturing in the UK and 34% are EU nationals of all skills levels. However, 31% of companies have reported that some EU nationals have already left. “Food regulation has come from the EU for 40 years and the UK has no experience of food regulation,” he added.

David Thomson pointed out that the UK is only 60% self-sufficient in food and 70% of imports come from the EU. Ireland is a significant importer of UK food – trade worth €2.8 billion annually.

There are some grounds for optimism regarding Brexit. “Surely, we can design a better system of agricultural support than CAP,” he remarked. “Many countries want to strike deals with the UK.” Furthermore, Brexit has brought the UK food chain closer together.

On the pessimistic side, he noted that “time is very short” and that “agriculture is very different to cars with a more fragile, time-sensitive supply chain.”

He continued: “Ireland is a critical test case for people for business as well as rules and regulations.” Unfortunately, the political aspect of the Brexit negotiations may hinder common sense.

In closing his address, he summarised the UK food and drink industry’s requirements for its future well-being as: to be still seamlessly connected to its biggest export and import markets; with new opportunities to access high quality ingredients/raw materials; and to be free to operate without undue regulatory burdens.

Northern Ireland Perspective

David Thomson was speaking at the recent 4th National Food & Drink Business Conference and Exhibition held in Dublin, where Declan Billington, Chairman of the Northern Ireland Food and Drink Association, provided a Northern Ireland perspective on Brexit.

“In Northern Ireland we cannot determine the final outcome,” said Declan Billington. “What we have to do is work out a game plan for each scenario. There are four or five different possible outcomes. The worst is no trade deal.”

Declan Billington, Chairman of the Northern Ireland Food and Drink Association.

No deal or a so-called ‘hard Brexit’ would result in WTO tariffs being imposed on all import and export trading.

Like the UK and Scottish food industries, labour is a major issue in Northern Ireland. “Uncertainty and exchange rates are already making it hard to replace EU workers who are leaving,” he said.

However, the food industry in Northern Ireland faces particular difficulties with regard to the impending Brexit due to its close links to the Republic of Ireland, which will remain in the EU. For example, 25% of the milk produced in Northern Ireland, 50% of the flour and 36% of sheep cross the border and into the Republic of Ireland for processing. “We are an all-island economy,” Declan Billington stressed, “we are unique.”

He continued: “We have to stop a WTO scenario it would be devastating to our industry north and south.”

However, he expressed concern about the UK Government’s appreciation of the particular problems that Brexit poses for the UK food industry and especially for Northern Ireland. “The Regional Governments of the UK do not trust London on food.” He added: “London has always been focused on importing food – not exporting.”

While imports may lead to cheaper food, Declan Billington pointed out: “The saving to consumers might be outweighed by the dole queues in the rural economies.”