Food industry cautious on Brexit deal

By Dan Colombini contact

- Last updated on GMT

The two sides have been debating the legal text of a deal, but the agreement will still need the approval of both the UK and European parliaments.
The two sides have been debating the legal text of a deal, but the agreement will still need the approval of both the UK and European parliaments.

Related tags: Finance, European union, Food

Food firms have welcomed an apparent deal between the Government and the EU, but experts and opposition MPs have warned that the industry’s worries are far from over at this early stage.

Prime Minister Boris Johnson confirmed yesterday (17 October) that he had secured “a great new dea​l” that “takes back control​”.

The two sides have been debating the legal text of a proposal, but the agreement will still need the approval of both the UK and European parliaments. However, Labour leader Jeremy Corbyn has already claimed that “the Prime Minister has negotiated an even worse deal than Theresa May’s, which was overwhelmingly rejected.”

Corbyn added that the current early proposals “risk triggering a race to the bottom on rights and protections: putting food safety at risk​.”

Positive move

However, the news could be greeted positively by many in the food industry, which has been extremely vocal on the negative impacts of a no-deal outcome.

A massive majority of the food industry wants a relationship with the EU, so in that regard – at the moment – it seems like progress, to a degree​,” Clive Black, head of research at Shore Capital told Food Manufacture​.

It is especially good news for the dairy industry, particularly in Northern Ireland. But it still has to get through the House of Commons, so we’ll know more by Saturday.

“The Democratic Union Party (DUP) looks like it will not support it and Labour don’t want to play ball with the Government at all. So, there remains the possibility that the can is being kicked down the road again and everyone is just sick and tired of the whole thing​.

Second referendum

We are also still facing the possibility of a general election, which by proxy will be a second referendum. So, beyond that there is the possibility of plenty of steps backwards.​”

The issue of Northern Ireland was raised by the DUP yesterday, warning that the EU would have a veto on which goods would be exempt under the Joint Committee arrangements.

This is not acceptable within the internal borders of the United Kingdom​,” a statement said.

Consumers in Northern Ireland would face the prospect of increased costs, and potentially less choice due to checks being implemented in order to facilitate the European Union.​”

But Clare Francis, head of Brexit advisory at law firm Pinsent Masons, called for further details before the real impact can be seen.

 “While some progress has been made, we do not know what will unfold in Parliament over the next few days and whether we will have an agreed deal​”, she told Food Manufacture​.

Without seeing the detail of the deal, it is difficult to make any assumptions around the impact that it will have on food manufacturers, however, those that have prepared for the worst-case scenario, e.g. a no-deal Brexit, will be in a good position.

Robust plans

“Many food manufacturers will have in place robust plans from March/April and, depending on the deal, could use these as a basis to then amend and adjust accordingly.”

Despite concerns from analysts, the Food and Drink Federation (FDF) has voiced its support of the news and said firms remain primed to act come the current departure date.

The UK’s food and drink manufacturers will welcome the news that a deal has been struck. They will hope that this means, definitively, that a no-deal exit on 31 October cannot happen,” ​said FDF chief executive Ian Wright.

“Our focus now switches to whether this deal can command the support of the UK Parliament, and what the detail of the deal means for our members. Their objectives are securing frictionless trade and regulatory alignment with the EU, our largest market. They also must have access to the workers our industry needs​.”

 

Related topics: Brexit

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