We’re leaving the EU. Be it hard or soft, the door is open and we’re already half way through. We’re already feeling the pain of the declining value of the pound, and it looks like things are going to continue in the same, uncomfortable vein.
But how will Brexit affect our food industry? Will we suffer at the hands of expensive imports and inability to efficiently export, or will we see a revival of love for British grown and manufactured products, offered at lower prices thanks to a reduction in EU red tape? Let’s see what the experts are saying.
Will Brexit make prices increase?
Britain is a new importer of food. In fact, we’re a really big importer of all sorts of food and drink, especially wine and foreign food types. A worrying prediction was published by Moore Stephens at the end of 2016 that 5,500 restaurants could go bust in the next three years due to stagnating disposable incomes and rising food prices. They aren’t alone in their bleak outlook.
Boss of Tesco, John Allan, warned last year that food prices were likely to rise as Britain negotiates its way out of the European Union. This would be partly due to the falling value of the pound, but also could be impacted if Britain loses its huge base of migrant workers who perform ‘ordinary but nonetheless extremely important jobs’.
Allan is not the only one worried about our loss of migrant workers. Just a few months ago, a group of 30 food industry representatives expressed concern that our leaders should do everything they can to retain the labour of ‘highly flexible’ EU workers.
Back in March of this year, it was reported that food prices rose at the fastest rate for more than three years as retailers began to pass on their increased costs resulting from the Brexit hit pound. At this time, inflation on food hit one percent, which is the highest rate it’s been marked at since February 2014.
On the other hand, our post Brexit isolated economy could mean a revival of ‘British grub’, where we become more reliant on the foods we can actually produce at home, instead of relying so heavily on imported food and drink. Accurately predicting the outcome is almost impossible, and remains to be seen once we are officially out.
Potential impacts on specific industries
Whilst it’s difficult to accurately predict the impact Brexit will have on the food industry, we can make some intelligent assumptions regarding impacts on particular sectors.
Animal protein: The UK imports 45 per cent of its bacon requirements. It is predicted prices of this and other imported meats will go up as new border measures increase costs.
Drinks: The UK beer industry is a small net exporter, so the impact of Brexit is expected to be minimal. Scotch whiskey could see potential trade barriers deteriorating the position of Scotch against whiskies from Ireland.
Consumer foods: British food retailers may not be able to buy private label products from the continent, and British based companies who produce for the EU may decide to redirect, cancel or postpone their investments in the UK in favour of EU countries.
Dairy: The UK imports a lot of cheese and butter, largely supplied by Ireland and France. Chances are these trades will continue, although under different agreements, and the probability is that the impact will be felt at the consumer level, as the cost of these popular essentials begins to soar.
Farming: Most farm inputs in the UK are imported, and the inevitably weaker pound will make for higher prices on imported products. Innovative products which may be approved for use in the EU will require separate approval in the UK, which could delay our farms using potentially excellent technology, or could exclude them altogether.
At this stage, all this is just speculation. It’s very difficult to say for sure how things will play out, and an awful lot will depend on the deals that May / Johnson / A. N. Other can strike for the UK in the wider EU field.