What relevance would a ‘yes’ in the Scottish independence vote have for the food industry in the UK?
British supermarket chiefs have been among the first in the business community, beyond overtly pro-independence Scottish executives, to raise concerns about what independence may mean for their businesses and customers north of Hadrian’s Wall.
The prospect of a new nation state brings concerns about higher levels of complexity and therefore cost - new regulators and so forth - plus the prospect of Scotland being ‘freestanding’ almost on a distribution and supply basis.
With its relative remoteness, the present cross-subsidies to broadly national pricing strategies may not apply, potentially raising Scottish prices for the chains, albeit possibly boosting local procurement to some degree.
” The present cross-subsidies to national pricing may not apply”
Of course, such matters would pale into insignificance if the UK government stands by its pledge to refuse, on broad national interest grounds, the new country access to sterling. If Scotland is not allowed access to the EU either, considerable upheaval can be expected. What will Scottish farmers do outside an EU support mechanism? Will agricultural tariffs apply to trade with the Union?
Legal experts suggest that to join the EU as an independent state, Scotland will be required to join the Eurozone and apply free movement agreements, potentially meaning border control with England and Northern Ireland.
What will the exchange rate be between Sterling and the local Scottish currency? Will there be a change in perception as to the relative attractiveness of regional and national food brands as the debate becomes more heated and perhaps destructive?
Alex Salmond speaks of the North of England as being Scotland’s best friend. What does that make the rest of the UK, and do best friends tend to be ex-family members?
Scottish independence is a big issue for everyone in the food industry in the UK, from farmer to distributor. The outcome of the vote is something that must be respected, as must its consequences.
Dr Clive Black is head of research at Shore Capital Stockbrokers
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