No-deal pig meat import tariffs released

Wednesday, 13 March 2019

By Bethan Wilkins

Following the MPs vote to reject Theresa May's Brexit deal for the second time last night, the government announced the proposed tariff regime that would apply under a no-deal Brexit.

The new tariffs would apply to all WTO member countries that the UK does not have free trade deals with, including the EU.

While most tariffs have been reduced to zero, tariffs on most pig meat products will remain in place, but will be reduced to around 13% of the current rate the EU applies to countries outside the bloc. The tariffs are applied on a per kg basis, but are higher for more valuable goods. A full list of the new tariff regime is available here.

UK pig meat imports are currently sourced almost entirely from the EU, and as such enter the UK with no tariff at all. These shipments account for around 60% of domestic consumption. Looking at the breakdown of products the UK imported last year, and the average prices for these products, the new tariffs would equate to around 4-5% of the price of pork, bacon and ham imports.

Noticeably, sausages have not been included in the tariff schedule, and will be zero-rated. Sausages account for up to 15% of UK pig meat imports annually. Sausages are not classified by constituent meat when traded, so the total volume will include some non-pork based products. However, it is fair to assume the majority of the imports will be pig meat based.

Altogether, these tariffs could push up the cost of importing pig meat from the EU by around 3%. Of course, administrative costs, and any fall in the value of the pound under a no-deal scenario may also elevate this further. However, some of the costs may be borne by the EU exporters.

While these tariffs increase the cost of importing from Europe, importing from the rest of the world becomes cheaper. While supply chains are unlikely to change dramatically overnight, lower tariffs on US and Brazilian pork may lead to increasing competition from the regions. Further analysis on this risk will be conducted.

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