THE UNITED KINGDOM, London. Trade body British Meat Processors Association (BMPA) has warned of the impact of a no-deal Brexit situation on the sector.
CEO Nick Allen said European customers who were considering buying British meat are now being confronted with multiple risks. "Chief among them is the possibility that they may well be saddled with tariffs as high as 65% on certain imports that are due for delivery after 31 October," he said. "Committing to any orders or supply contracts that extend after the Brexit date therefore makes no sense whatsoever to our customers in Europe and, indeed, in the rest of the world."
He said this reluctance to buy British produce will work its way along the supply chain.
"Reduced orders from our biggest and closest trading partner, which are not easily and quickly replicated elsewhere, will filter all the way back to UK farmers who will bear the brunt of this loss of trade. It will put many out of business and, once they're gone, it won’t be easy to re-establish those farm businesses. "
"Insurers that cover these consignments and facilitate the movement of goods between countries are refusing to indemnify against losses related to a no-deal Brexit. Couple that with a volatile exchange rate, mooted border delays and complete uncertainty surrounding whether Brexit will even happen on 31 October means the obvious solution for EU buyers is to source product from elsewhere."
Citing various sources, Allen said UK businesses might have to "take no deal Brexit on the chin", especially as the 31 October deadline approaches. "Reports from the CBI, the Institute for Government and evidence from George Hollingbery MP to the Commons International Trade Committee all point to a national lack of preparedness for Brexit.
While some contingency planning has been happening there is a limit to what can be done and how much can be spent planning for no-deal. Cold stores up and down the country are already full in anticipation of Christmas, an added complication that wasn't a factor back in March.
"In reality, many of the problems that a no-deal exit will cause can neither be prepared for nor mitigated. This is the instantaneous shock to the economy on 1 November that Mark Carney described in a recent interview. Meat processors must risk committing to buying stock that they may not be able to sell and then take it on the chin if their export market collapses."
Allen added that trade deals with the US wouldn't necessarily replace EU business, especially if the relationship with Ireland is damaged. "Nancy Pelosi, Speaker of the US House of Representatives, along with various influential pro-Irish committees in Congress have made it abundantly clear that they will block any trade deal if Brexit harms the Good Friday Accord. In such a scenario, a UK/US trade deal would, in Mrs Pelosi's words, have no chance. "
Recently, the BMPA got into a debate with the National Farmers' Union over support for the beef sector following a significant drop in prices.