The BREXIT debate keeps returning to the food and drink sector with concerns that range from Welsh lamb being subjected to unsustainable tariffs if exported through food imports not getting in whilst the term ‘chlorinated chicken’ is raised as a threat from the USA should we be forced to have a trade deal.
So, will we starve? No, but we will pay more for our food and perhaps not have access to some until new commercial arrangements come in if we have a no-deal.
Why? Because no-deal means both tariffs and delays and whilst those are not insurmountable problems it does mean companies will take the view that until there is certainty, they will not risk produce being delayed or priced out of the market.
The real problem is the hidden issue of costs; the weaker currency combined with tariffs makes getting ingredients, packaging and labour increasingly difficult. We know of businesses closing because they can’t get staff at the right money and their input costs are already rising due to weak currency. Add a tariff or a load of admin work and business become unviable. Remember, supermarkets have driven costs and prices down over the last couple of decades so there is not the profit to absorb extra costs.
Surely, we can grow more ourselves? The biggest problems are the animal feeds, fruits and drinks that people assume are produced here but are actually produced in Europe as outsourcing is cheaper.
To make milk we need soya (to feed cows) and that comes from either eastern-Europe or south-Americas. We could substitute with the likes of home-grown peas and beans, but we don’t even have the processing capacity to convert these into cow-cake in the short-term.
Generally, we employ over 50% non-UK nationals to work in food, drink and agriculture. Sadly, thanks to the 30%+ devaluation these people have had a perceived wage cut, so understandably are either not arriving or even going back to their home countries. Plus, the general feeling of not be welcome anymore thanks to Brexit encourages them to leave.
Chicken, be it cheap chicken from the USA (the chlorination is to reduce the threat of food poisoning from birds that have been very-intensively reared) to the higher cost of home-grown chicken because the imports or costs of protein such as soya are all in the debate. In short, we will pay more because some costs will go up and already have thanks to weaker currency. Chicken is a largest single cost item in most households shopping baskets as it is a large source of protein. The issues are complicated but in-essence if you don’t pay the right price for your food you will get a sub-standard product that has not respected animal welfare standards but you will also run the risk of making it impossible for UK farmers to compete and they will very quickly stop producing and that will make us even more vulnerable to imports and the risk of not producing our own food.
In short; BREXIT may make food more expensive, more vulnerable to market forces, reduces our ability to plan and produce sustainable foods ourselves and reduces our export opportunities in the short-term. That might impact investment and people who will avoid the risks of being employed or invested in food and drink.