Stephen Cadogan: Brexit could equally damage food and farms in UK

Four million new supporters have emerged from an unlikely source for Ireland’s food and drink sector, as it fastens its safety belt ahead of the Brexit impact.
Stephen Cadogan: Brexit could equally damage food and farms in UK

They are 4m employees of food and drink companies in the UK, whose representatives have warned the government in Westminster that the UK and Ireland depend too much on each other for food security, to risk Brexit disruption.

This reminder to protect the interests of the 13.5% of the UK workforce employed in food and drink puts a lot of extra pressure on British Prime Minister Theresa May.

She has been told nearly a fifth of UK food and drink exports go to Ireland, buying more than the US, China, Russia, Brazil, Canada and Japan combined.

Furthermore, a quarter of all Northern Irish milk is processed in the South, and the UK supplies 80% of the flour used in the Republic.

That why significant economic damage and food price inflation are feared by the industry in the UK, due to disruptive Brexit customs barriers, port health controls and other costly bureaucratic requirements that impede the movement of goods and workers and upset established supply chain networks that operate across the UK and Ireland.

The open letter to Theresa May’s government from 35 representative bodies in the British food and drink supply chain will leave the PM in no doubt that 4m voters who work in UK food and drink firms, plus consumers, could turn on her, if Brexit damages UK food and drink companies.

She has two years of negotiations to set their minds at ease, if she notifies Brussels in the coming days of the UK’s intent to withdraw from the EU, as expected.

However, once she crosses the Rubicon with her Article 50 decision, she will be at the mercy of the inevitable trade-offs and compromises in the historical EU-UK divorce negotiations, which Agriculture Minister Michael Creed has described as “the challenge of our times”.

That’s why, here in Ireland, exporters who depend for their livelihood on the Brexit outcome seem pessimistic, and are preparing for the hard Brexit which even their counterparts in the UK food and drink sector warn will be very disruptive.

Evan as Theresa May prepares the divorce papers, the Irish Exporters Association is turning its attention towards finding new trading partners.

The IEA has called for new shipping and air links with continental Europe and the rest of the world, and efforts to become more cost-competitive.

Although 94% of IEA members do business with or export to the UK, and 39% say more than 25% of their exports go to the UK, what is uppermost in their minds now is getting alternative transport links to avoid the use of the UK land bridge, and to keep costs down, all part of preparations for a Brexit “hard border” to be put in place.

Exporters are already researching new shipping routes from ports with the best access to Europe, such as Rosslare.

Some say they would try to cope with a hard Brexit by sourcing more of their supply needs from the UK, locating more staff in the UK, and shifting some production to the UK.

Irish exporters know the UK is already being approached by non-EU countries eager to do food and drink business with it.

And their best guess at the outcome of EU negotiations with the UK is something closer to the Turkish model of a partial customs-free union than the Swiss model, which requires contributions to the EU budget.

They are also aware the UK may look for import and export quotas, perhaps frozen at current levels, without tariffs.

The food and drink industries on both sides of the Irish Sea know they are completely interdependent, but politicians have hatched plans which could see that interdependence exploded, and there will be nothing anyone can do to protect their particular interests, once Theresa May presses the Article 50 button — other than prepare as best they can for the worst.

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