The food and beverage industry has reacted to the UK government’s confirmation that it will leave the European Union (EU).
Prime Minister Theresa May has invoked Article 50 – the mechanism by which a member state can withdraw from the EU – giving the country two years to negotiate the terms of its exit. The move, long awaited since the UK voted to leave the EU in June, will dramatically change the country’s export landscape.
Manufacturers are particularly concerned by the prospect of legislative ‘black holes’, should the UK leave the EU without replacing European directives.
There are also questions about the country’s continuing trade relationship with the rest of the EU.
Groups representing 200,000 manufacturers across Europe and the UK have called on negotiators to agree a Brexit deal that supports trade and reduces the risk of economic shocks. It comes after retail pricing specialist Simon-Kucher warned of significant price rises after the UK sets in stone its intention to leave the EU.
Manufacturing alliance CEEMET, which includes the UK’s EEF along with French, German and Italian manufacturing organisations has called on both sides to “affect a stable and orderly exit, preserving as much as possible the often complex and delicate trading relationships that are in place.”
CEEMET director-general Uwe Combüchen said: “If we are to avoid a ‘lose-lose’ outcome for European manufacturing, it is essential that all parties work towards a reasonable deal for industry, while ensuring the integrity of the single market. Simply put, a negotiation which produces no deal would be highly damaging for industry in the EU as well as the UK.
“There must be pragmatism on all sides. It is not in the EU or the UK’s interests to lead industry to cliff-edge decisions, which will ultimately damage investment opportunities and business confidence.”
And EEF CEO Terry Scuoler said: “These negotiations [around the UK’s exit from the EU] are likely to be amongst the toughest and most critical the UK has ever been involved in. It is imperative that the government is focussed on securing a deal that will enable both British and European businesses to flourish, investment and innovation to continue and trade to flow. This will be the lifeblood that is key to the UK’s future economic success – we cannot afford to see it disrupted or turned off in mid-flow.”
May’s government has been criticised, in particular, for refusing to guarantee the status of EU nationals living and working in the UK, raising questions about the availability of affordable labour after the country leaves.
“As a priority, we now want to see the government seek early agreement with the EU over the future of EU citizens living and working here in the UK and their British counterparts similarly living and working in Europe. Not only is this the right thing to do, but it will send out a clear and reassuring signal to EU workers and the many British businesses that rely upon their skills to drive innovation and growth in the UK.
“Above all, it’s time for the Government to demonstrate its support and understanding of business by striving to deliver a pragmatic and realistic deal. Forget all notion of crashing out of the EU without a deal and leaving business to pick up the pieces – focus instead on an orderly and smooth transition, the continuation of barrier-free trade, minimisation of costs and ongoing access to required talent and skills. Nothing less will do.”
Adam Sharpe, editor of Informa Agribusiness Intelligence’s Agra News, said that there was lingering uncertainty around the future of Britain’s agricultural industry.
“Article 50 has now been triggered, but it is still far from clear what the state of play for both farmers and shoppers will be once 2019 arrives. Food and Farming Minister George Eustice has promised a clear vision on a replacement for the Common Agricultural Policy (CAP) by 2018 to avoid a cliff edge for British farmers, which will offer some relief.
“But given the lack of policy detail thus far around the ‘five core principles’ outlined previously by environment secretary Andrea Leadsom, and given continuing uncertainty about levels of funding for UK agriculture from the Treasury post-2020, it is unlikely that the concerns of UK farmers will be appeased just yet.”
The triggering of Article 50 brings ‘both challenges and opportunities’, according to the chief executive of the Wine and Spirit Trade Association.
Miles Beale said: “The triggering of Article 50 signifies an historic moment as the UK begins a new journey. The WSTA will be working tirelessly to achieve our key aims: continued tariff-free movement of wines and spirits to and from the EU, new tariff-free trade agreements with priority countries outside the EU and equally safe passage of goods without extra checks at borders once we have left the Customs Union.
“A phased leaving process will allow time to establish an EU free trade agreement and to put in place the necessary systems and infrastructure. Failure to do so risks disruption to supply chains, chaos at UK ports, increases in costs for UK businesses and ultimately even higher prices for consumers.
“We stand together with our European Trade Association partners in our joint ambition to secure free trade flows. We have repeatedly said to government since the referendum that the only way to achieve its aim for a frictionless Brexit is for the Government and industry to work in partnership.”
The president of Comite Europeen des Entreprises Vins (CEEV), the trade association representing the remaining 27 member states, branded the UK wine market of the ‘utmost importance’ for EU wine producers.
Jean Marie Barillère said: “EU wines and UK consumers have had a special relationship for centuries and shall continue to have it despite Brexit. With EU wines representing about 55% of UK wine imports, there is no doubt that the UK market is of utmost importance for EU wine producers, and that the British really appreciate European wines. Ensuring smooth wine trade flows is important to both the EU and the UK economies.”
And Ignacio Sánchez Recarte, secretary general of CEEV, added: “The overall objective of the CEEV is to ensure that there will be no disruption of wine trade flows between the United-Kingdom and the EU-27. To allow business and administrations to adapt to the new system of trade relations – a future EU-UK Free Trade Agreement (FTA) – it will be fundamental that leaders on both side of the Channel agree on a transitional period and on a FTA in a time frame that will reduce uncertainty as much as possible.”
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