No-Deal Brexit is Going to Burden the Meat Sector with More Cost

Those who export red meat could face extra costs when conducting business in the UK. This could lead to a price-hike in the restaurant and hospitality industry, causing a knock-on effect across the entire sector.

A new study has been done by the SAOS and they have suggested that there could be a sharp rise for exporting meat to the EU. The price would go from £216 to £276 per order, whether it is a single box or whether it is an entire lorry full. The majority of this expense is going to come from employing a vet who can inspect the order prior to it being shipped. This alone ranges from £140 to £200. The additional £76 is going to cover the additional time that it takes to process an order and to also allow it into the EU destination. These costs will hit a lot of smaller orders, which would make businesses that operate in the EU unviable due to the competitive market.

A no-deal Brexit could be the biggest risk to the red meat sector and the food industry in general. The export and import sector is also very competitive and the additional costs could have an impact on sales. If this does happen, businesses and jobs would almost certainly be at risk.

The lamb sector is vulnerable, and this is especially the case when you look at the fact that 26% of Scottish lamb alone is exported. Figures for the UK are even higher, being 30%. Out of this lamb, 90% is sold to the EU. Of course, a no-deal Brexit would essentially mean that ALL trade with the EU, whether it’s importing or exporting would need to be carried out under the World Trade Organisation. The UK would need to comply with additional form tariffs. This tariff currently stands at 0% but it could rise sharply if some kind of deal is not struck in time.

Lamb would rise to 48% for exports, but any lamb that comes imported from New Zealand would continue to have a 0% tariff. Undercutting British farmers could damage the farming industry in the UK, and it could also make it harder for restaurant owners to source red meat affordably.

The SAOS have also reported that new trade opportunities with other countries could help to create a new market for red meat. This is especially the case with Asia and even North America. When you look at the UK Food and Drink Federation however, you’ll see that the UK government have secured a continuity agreement for just 15% of the existing agreements. This represents 43% of the UK’s food, to nations where there is an agreement already. The Federation have noted that the export growth has been 3x stronger to countries that are not part of the EU when compared to EU countries, and ministers have been urged to secure even more continuity agreements.

The FDF is concerned because the UK is going to lose an essential market if a no-deal Brexit was to go ahead, and the government must deliver on the promises that they have made if they want to protect the UK when it leaves the EU.