Thursday, 24 December 2020
The EU has been our major trading partner for over 40 years. Some 60% of our food, feed and drink exports in 2019 headed to the EU and it provided 70% of our imports. Although reaching a trade deal with the EU means that the eye watering tariff for many food products between EU and UK will be avoided, changes to that close relationship still means increasing costs and complexities due to the fact that the UK will be leaving the single market and trading with the EU as a third country.
This trade friction, in the form of additional paperwork, physical checks and labelling requirements will squeeze the already tight margins within the supply chain. AHDB analysis estimates these costs range from 5% to 8% for livestock products and 2% to 5% for crops, and are likely be reflected in farmgate prices, i.e. the farmers are likely to bear the brunt of these additional costs. These estimates do not include the cost of potential delays at port, which may result in a further loss of value of perishable loads.
It is therefore imperative that businesses prepare for the challenges that lie ahead and ensure they are ready to adapt to this new trading environment.
At AHDB we have been assessing the impact of EU exit and supplying information to the industry and Government. We have also been working to mitigate the negative impacts of EU exit through developing the market for our levy payer’s products at home and overseas. You can find out more about this and how you can prepare your business for EU exit by visiting the dedicated section of our website here.