As Brexit Deadline Nears, Tariff Concerns Irk Food Sector

With Parliament poised on the evening of March 13 to vote on whether or not Britain will leave the European Union sans a deal with Brussels, following yet another rejection of Prime Minister Theresa May’s Brexit plan, the UK Food and Drink Federation (FDF) commented on the political gridlock in no uncertain terms.

190314 brexit graphic02“Today's announcement on tariffs underlines why the UK is not ready to exit the EU on 29 March,” said FDF Chief Executive Ian Wright. “Business cannot adapt to this new regime in just two weeks. It is disgraceful that we are, only now, getting to see these. There must be proper consultation with business before a change of this magnitude is introduced. We were promised that business would only have to adapt to one new change of rules; it's now clear that promise has not been kept.”

He continued: “This new system is confusing and complex. It includes some zero tariffs, some new tariffs and some quotas. Some foodstuffs qualify for partial protection and some not for any protection at all, with little logic to explain the difference. New tariffs will apply to some foods that are currently imported tariff-free, yet no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland. This is likely to result in massive trade distortions.

190314 brexit graphic01“In a world where it is costly and complex to export finished goods to the EU, and costly and complex to import key ingredients, many food and drink manufacturers who trade with the EU will surely question whether the UK is the right place for them to be.

“This is yet another reason why Parliament must act decisively to remove the threat of exiting the EU without a deal on 29 March 2019.”

Earlier in the day, FDF issued a separate statement addressing Parliament’s overwhelming defeat of the Prime Minister’s Brexit deal proposal for a second time on March 12.

“Tonight's result is another body blow for the country and the UK's largest manufacturing sector. As we teeter on the brink of the cliff edge, just 17 days' away, confidence in our political leaders is almost gone,” said Wright. “We can only hope that members of Parliament, tomorrow and on Thursday, will vote decisively – and act accordingly – to take a 29 March 'no-deal' exit off the table. We now need breathing space in which a clear way forward can be found.”

A fortnight ago, FDF’s position held that while a three-month delay would provide a little more breathing room, it could also play havoc with careful supply chain and logistical planning based on a 29 March exit and the seasonal availability of ingredients and warehousing space.

“Such a delay may also mean three more months of diverted time, effort and investment,” commented Wright on February 28. “Based on the last three months – which have at times been shambolic – the food and drink industry will seriously question what government could achieve by extending the Brexit deadline for such a short period of time.”