How will Brexit Affect the UK’s Food and Drink Industry?

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Brexit

The process of Britain leaving the European Union is now well underway but in many industries – food and drink included – the uncertainty regarding the future landscape is as strong as ever.

There are several areas where Brexit could impact on the food and drink industry, with the key areas affected likely to be as follows:

 

1. Employment

As yet, nobody knows what the status of the swathes of foreign workers currently employed and living in the UK will be. As it stands, certain areas of the food and drink industry employ huge numbers of EU workers. Almost half of those who process and preserve fruits and vegetables come from EU member states, while in the meat processing sector, this figure is 44%. Almost 90% of seasonal fruit and vegetable pickers hail from EU countries. Will the arrangements that are made allow EU worker numbers to remain this high in the future or will staff shortages start to become a problem?

 

2. The economy

A hard Brexit that destroys existing trade agreements could prove disastrous for the British economy. One option is to introduce tariffs, which would see prices of imports from the EU pushed up. For those countries where tariffs apply, for example, a 36% tariff is charged on dairy products. With Britain importing 25% of its milk from EU member states, prices charged to consumers would be likely to rise.

We must also consider the economic impact of a hard Brexit on European businesses that currently have operations in the UK. Would Brexit make it economically viable for them to continue to operate in this way or would they move operations to another EU country, thus decreasing supply and reducing the number of available jobs?

 

3. Trade with Ireland

Ireland currently purchases almost 20% of food and drink exports from the UK and it is the only land border the UK shares with an EU country. It remains to be seen how border controls will be affected by Brexit: will such trade deals become more of a challenge in the future?

 

4. Potential loss of farming subsidies

An incredible 55% of all farming income in the UK is currently provided by EU subsidies through the EU’s Common Agricultural Policy. In 2016, farmers received around £3bn in support from this scheme: without access to these funds, it is likely that only the larger scale farms would survive. It remains to be seen whether the CAP will be replaced with a British scheme that supports our farming community.

Brexit effect on farming subsidies

Currently, nothing has been set in stone when it comes to Brexit plans for the UK’s food and drink industry but worst-case scenarios potentially reveal the level of turmoil that leaving the EU could leave in its wake. In the meantime, food and drink businesses should continue to offer the same great quality and service they always have done.

Take a look at 1Cold’s range of cold rooms, industrial chillers and cold stores. Designed specifically for food and drink industry needs, our purpose-built temperature controlled environments will help to maintain the standards of the UK’s perishable produce.