News

UK drinks producers risk rules of origin 'Hard Brexit' - research

Most popular

Indonesia the wildcard in CCA buy - comment

Why rum should avoid gin's template for growth

Will Diageo earn its gin wings with Aviation?

The just-drinks analyst returns

What rum needs to do to recognise its potential

MORE

UK drinks companies face the threat of their own 'Hard Brexit', a trade association has warned, if 'rules of origin' agreements between the UK and the European Union aren't treated separately to existing Free Trade Agreements.

Negotiations between the UK and the European Union are continuing, ahead of the departure date of 29 March next year

Negotiations between the UK and the European Union are continuing, ahead of the departure date of 29 March next year

A report commissioned by the Food & Drink Federation, in collaboration with the National Association of British & Irish Flour Millers, claims that the supply chains built up within the EU Single Market by many UK food and drink companies risk being in breach of future origin requirements. When the UK leaves the EU, the report warns, these companies would have to deal with tariffs that have not previously applied.

Rules of origin refer to the "economic nationality" of a product, and whether it qualifies for a preferential tariff that has been agreed in a trade deal. Often, a product that is recognised as being British will contain ingredients that have been sourced from other countries.

Consequently, upon leaving the EU, UK food and drinks companies "could face the prospect of either a costly restructuring of their supply chains," the FDF said, "or de facto barring from future EU-UK trade as a result of the EU's Most Favoured Nation tariffs". These tariffs are "prohibitively high for food and drink, rising to more than 100% on many of our products".

The FDF cited UK chocolate as an example, producers of which could face tariffs of 27% or more, depending on the value of UK refined cane sugar originating from the world's poorest countries and the volume of Irish milk in their products.

"If we fail to secure sufficiently generous rules as part of a preferential trade agreement with the EU, food and drink manufacturers will be the ones who suffer this hidden hard Brexit," said the FDF's DG, Ian Wright. "They could be facing an increase in exporting costs, or a complete ban on entry to the market."

The UK exported GBP22bn (US$30.7bn) of food and drink in 2017, according to the FDF, with GBP13.3bn - 60% - going to the EU.

The UK is set to leave the EU on 29 March 2019.

Full details of the report - 'Rules of origin in an EU-UK FTA: A 'hidden hard Brexit' for food and drink exporters?' - can be found here.

Why Brexit is a disaster for the wine category - Click here for a just-drinks comment


Related Content

Food & Drink Federation expresses frustration over Brexit progress

Food & Drink Federation expresses frustration over Brexit progress...

Wine and Spirit Trade Association calls for wine tariff suspension as Brexit looms

Wine and Spirit Trade Association calls for wine tariff suspension as Brexit looms...

UK wine drinkers poised to pay more for EU wine as no-deal Brexit looms

UK wine drinkers poised to pay more for EU wine as no-deal Brexit looms...

UK wine businesses prepare for US$90m costs rise if Brexit hits hard - trade association

UK wine businesses prepare for US$90m costs rise if Brexit hits hard - trade association...

Oops! This article is copy protected.

Why can’t I copy the text on this page?

The ability to copy articles is specially reserved for people who are part of a group membership.

How do I become a group member?

To find out how you and your team can copy and share articles and save money as part of a group membership call Sean Clinton on
+44 (0)1527 573 736 or complete this form..



Forgot your password?