Failure to strike a trade deal with the EU after Brexit would be “disastrous” for UK food and drink exports and must be avoided “at all costs”, a Committee of MPs have warned.
A future move by the UK to lower or remove tariffs could also have extremely damaging consequences for British farming with only the prospect of very limited benefit to consumers in terms of lower prices, according to a new report by the Commons Business, Energy and Industrial Strategy Committee (BEIS).
The report, The impact of Brexit on the processed food & drink sector, published today (22 April), examined the impact of non-tariff barriers, regulatory alignment, transitional arrangements, trade opportunities, and the food and drink sector’s critical reliance on migrant workers.
It called on the government to offer clarity for UK producers reliant on the EU for both imports and exports, and warned it should make securing a free trade deal its number one priority, or face considerable impact on prices and availability of the 30% of food imports that currently come from the EU.
“The processed food and drinks industry is the UK’s largest manufacturing sector, contributing £28.8bn to our economy and employing hundreds of thousands of people throughout the country,” said Committee chair Rachel Reeves MP.
“British consumers are very discerning and rightly expect the highest food safety, animal welfare and environmental standards. Consumers also value the variety and choice of products when they do their shopping. The success of the industry has been highly dependent on participating in the single market and customs union.”
The warnings follow those of the Commons Efra Committee, which last month said the government’s Brexit preparations were “inadequate”.
It would be “unrealistic to expect the sector would stop relying on the EU as its main export destination” in the immediate future, the report warned. Four of the food and drink sector’s top five export destinations were EU countries.
Only for beverages did exports exceed imports, it said, adding that the UK imported almost 40% of the food it consumed, with significant proportions of our fruit, vegetables and meat potentially exposed to a no deal scenario.
The consequences of lowering or removing import tariffs in future could be “extremely damaging” for British farmers and producers, while any positive impact on consumer foods was likely to be “very limited”, the cross-party committee cautioned.
“To ensure the continued success of our food and drinks industry, the government must provide clarity and certainty on our future relationship with the EU and seek continued regulatory, standards, and trading alignment with the EU in the processed food and drink sector,” added Reeves.