UK food and drink producers ponder post-Brexit challenges
By Alan Bullion
The UK food and drinks sector is becoming increasingly preoccupied with potential labour shortages, currency fluctuations, price spikes, and supply chain setbacks, as the possible pitfalls from Brexit loom large on the horizon.
A London seminar organised by the Food and Drink Federation (FDF) on 'Exiting the EU' heard that most member organisations were concerned over the lack of clarity in government policy, although several others were looking positively and optimistically at fresh opportunities for world trade beyond the EU.
The prospect of "sweetheart deals" for the UK food and drinks sector was raised in a question to Liberal Democrat Brexit scrutineer Nick Clegg, in a question from Agra Europe. Clegg concurred that if the automobiles and aerospace sectors could attract special concessions from government, as pledged by minister Greg Clark to Japanese carmaker Nissan, then UK food and drink manufacturers could also legitimately ask questions about the likely impacts of Brexit for their businesses regarding trade tariffs, access to the EU Single Market and Customs Union, and free movement of labour. "It is jumble sale economics to start issuing promissory notes to companies without disclosing the details," he maintained.
Clegg also attacked the "ludicrous Utopianism of a low cost zero tariff scenario" that 'Hard Brexit' trade spokesman Liam Fox and others were proposing, arguing that this highlighted the need for greater transparency and detail on the trajectory and specific intent of Conservative government policy in the months ahead, which Prime Minister Theresa May has rejected.
This demand for closer scrutiny and oversight by MPs has now been thrown into sharper relief by a judicial decision from the High Court that parliament has a sovereign and legitimate role in questioning and debating the terms and conditions for triggering Article 50 prior to Brexit. This might delay the Prime Minister's timetable for departure by the end of March 2017, although it could still be subject to a further challenge from May's cabinet in the Supreme Court before Christmas.
The complexity off cross-border trade between the UK and Ireland was magnified in several exchanges between speakers and delegates. For the flour industry, Alex Waugh, director general of the National Association of British and Irish Millers (Nabim), commented that 80% of the flour used in Ireland came from Northern Ireland and the rest of the UK. This interdependency meant that any supply chain disruptions should be as smooth as possible.
The dairy sector expressed similar views on trade with China involving Irish and UK cross-border ingredient supplies, and how straightforwardly these might be approved post-Brexit. But other producers said this provided opportunities for sourcing more domestic ingredients, and cutting down on imports.
In Wales, many small and medium sized food companies were also nervous about rising ingredients prices and continued ease of trade across the Irish Sea, although some were already scouting out fresh customers further afield, for example, gluten-free and halal food exports to the Middle East.
Another area of growing concern was the free flow of farm and processing labour from Eastern Europe, which some companies commented was already being adversely impacted by the post-Brexit environment of hostility towards migrants, the perception they may not be welcome anymore in the UK, and the gyrations in the value of Sterling meaning that wage remittance transfers were significantly reduced in value.
Professor Tim Lang of City University also emphasised the significant dependence that the food service sector had on migrant labour, especially in London. David Camp of the Association of Labour Providers (ALP), which represents some 70% of UK temporary employment agency members, reported that labour shortages in key sectors were already being seen ahead of the Christmas rush, including van drivers and home deliverers.
It was emphasised by other speakers such as Policy Exchange think-tank Professor David Goodhart that British food firms and farmers had relied too much on low cost migrant labour and it was now high-time to invest in upskilling domestic workers.
And those representing Indian sub-continent curry chefs have likewise been disappointed to date at the lack of any detail over whether they would benefit post-Brexit from more visas for south Asians to work in the UK catering and restaurants sector, creating a more level playing field of food labour transfer.
However, on food law, there were worrying gaps in knowledge displayed by some speakers. For the Department for International Trade, Rosa Wilkinson, director of Trade Policy Business Engagement, candidly admitted when pressed on whether the government was considering adopting Codex Alimentarius for post-Brexit crop protection product approval: "I don't know about Codex, as I've only been in the job for eight weeks."