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What Impact Will Brexit Have On The Food and Drink Industry

6 Dec 2016
Gail Halkett

The Impact of Brexit on the Food and Drink Industry

It is the topic that never seems far from anyone’s lips but that no one seems to have a definitive answer for. Brexit has captivated audiences and inspired debate in households and businesses up and down the country since July last year but in many cases we still don’t seem any further forward.

Positive Approach to Brexit

My colleague Jules and I attended the Food and Drink Conference on Brexit, hosted by Brodies LLP a few weeks ago and it was a real eye opener. The outlook for many representing the Food and Drink industry, which contributes £5bn to GDP and is around 22% of UK exports, was to focus on the potential positives that this European exit will throw up.

Some raised the obvious concerns that the EU will put up the barriers in an effort to discourage others from following a similar path. However, as I say, many of the speakers were positive in their presentations highlighting the need for the government to focus on finding the very best trading model with Europe in the context that there is a wider world we can open up trade links with.

Fishing Industry Post Brexit

The consensus amongst the fishing industry, which is worth over £500m in landings alone to the economy is definitely one of optimism. The feeling is that there is a real opportunity to bring the seas around the country back under UK control. The common Fisheries Policy (CFP), will no longer apply to the waters around our coast and will come under the control of the UK government. They highlighted the example of Norway and Iceland who have managed to negotiate their own rights to suit their country’s needs.

There was some concern raised about the fact that there is a lot of foreign labour in the processing side of the fishing industry but as Bertie Armstrong, Chair of the Scottish Fisherman’s Federation, mentioned,

“The opportunities vastly outweigh the challenges”

Whisky Industry Post Brexit

In a similar fashion the Whisky industry is coming at the problem with conservative optimism. Europe is a very important export partner. Of the £3.8bn of Scotch exported in 2015, £1.2bn was to Europe. Due to its protected status with the World Trade Organisation (WTO), Scotch Whisky will continue to benefit from 0% tariff on sales to Europe. The hope seems to be that operating independently we might be able to negotiate down the 150% tariffs that the likes of India impose and where demand is so high.

Alan Park, Director of Legal Affairs at the Scotch Whisky Association, highlighted the additional benefit of the UK becoming a free trade environment which is expected to create a more positive environment for foreign investors, something the whisky industry and others hope to benefit from.

There is expected to be more IP control to help the industry. Did you know that there are 40 different fake Scotch whiskys in Australia? The hope would be that we will have the resources to control these sorts of violations with a bit more urgency than having to deal with the EU bureaucracy.

Brexit Challenges

It is clear that there are challenges. The farming industry highlighted the very likely concern that tariffs will be added to a number of our exports. 96% of our lamb, 82% of cereals and 58% of potatoes are exported to Europe. If a tariff is added to these it will make exporting very difficult.

However in the face of these inevitable challenges there is strong optimism amongst those in the Food and Drink Industry, reiterated by Ross Martin from The Scottish Council for Development and Industry who said:

“Uncertainty can be the driver of positive change”

Author

Gail Halkett
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