What Irish agri-food product might be hit hardest by a no-deal Brexit?
It’s probably a toss-up between a few of them, but cider has emerged as a likely front-runner.
Up to 85% of Irish cider goes to the United Kingdom for sale. Most of the cider apples are grown north of the Border. If a no-deal Brexit includes a tariff on apples coming in, and a tariff on final product going out, there could be serious difficulties for this favourite Irish beverage.
The threat to cider was highlighted by the Alcohol Beverage Federation of Ireland’s Patricia Callan at a recent Joint Oireachtas Committee on Agriculture, Food and the Marine, where the impact of Brexit on the agrifood sector was debated.
The threat has deepened this week, after Prime Minister Theresa May’s cabinet agreed to set in motion elements of the UK’s no-deal plans, including reserving ferry space for essential supplies, and putting 3,500 military personnel on standby to respond to a possible no-deal Brexit. The military personnel will include engineers, mechanics and drivers to be deployed for any crisis if the UK crashes out of the EU without an agreement signed.
The danger of a no-deal Brexit comes closer, although Theresa May’s stated top priority remains to leave the EU on the basis of the deal she agreed with the EU-27, and many MPs believe she is ramping up the no-deal plans partly in order to force them to back her deal in a House of Commons vote next month.
What would make a no-deal Brexit even worse than we can imagine is that the sort of investment required by Irish food companies to be completely prepared for all events by Brexit (no-deal) Day, March 29, 2019, does not make business sense, because of the level of uncertainty over the Brexit outcome.
So said Food Drink Ireland director Paul Kelly at the recent Committee on Agriculture debate.
He said food and drink companies will do what they can, where there is little or no cost.
However, if substantial investment is required, most companies are not in a position to make it, in particular in low-margin businesses like food and drink.
Patricia Callan said the Government and its agencies are “absolutely not” prepared for a no deal Brexit, and are instead banking on a deal-Brexit, with a transition period available to prepare for the final UK break from the EU. Ms Callan maintained the Revenue Commissioners have no plan for customs on this island. She said planning by the UK authorities is also lacking, and warned we will be at the cliff’s edge on March 29, and no one can plan for that.
However, the Government says 85% of Enterprise Ireland exporting firms have a Brexit plan, but Brexit preparedness needs to improve among small and medium enterprises that export to the UK. Seminars are available to advise them on becoming Brexit-ready. Customs training, and low-cost loans are available.
At least 200 new customs officials will be in place in March, but can be increased to a much greater number for a no-deal Brexit. Rosslare will need infrastructural investment, as will Dublin Port and Dublin Airport, according to the Government.
The Taoiseach has said there are plans to pass 45 emergency Bills next year in the Oireachtas if there is a no-deal Brexit. Tánaiste and Minister for Foreign Affairs and Trade Simon Coveney is to publish a framework document on Brexit contingency planning today.
However, the truth is no amount of preparation will suffice if the UK itself hasn’t prepared fully for a no-deal Brexit. An Arla Foods UK study of the impact on the dairy trade says border veterinary check workloads would grow by 372%. Transport times would increase by 10 hours, with additional costs of over £100 per container.
The UK has the second largest dairy trade deficit in the world, and faces lack of availability of dairy staples in supermarkets, especially of products such as speciality cheese. Only by watering down the UK’s high food and animal welfare standards could production be ramped up quickly.