Cost of imported fruit and veg could jump 8% after Brexit

Basket of veg

Analysts Rabobank claim fruit and vegetable price hikes are likely once Britain has “divorced” the EU no matter why type of trade deals are struck.

The UK is still extremely dependent on a multitude of fresh produce and irrespective of what is negotiated as the UK finalises its EU exit over the next two years, food prices will jump, according to Rabobank’s Harry Smit, senior analyst farm inputs & farming.

He has authored a report - Future Food Security in the UK: the Impact of the Brexit on Food and Agribusiness in Europe and Beyond - which examines future trade with the UK.

“The potential impact of Brexit on food and agriculture companies in and outside of the United Kingdom is huge. The UK is only 60 percent self-sufficient in terms of food, and is therefore a major net importer of F&A products,” he says.

“The Netherlands is one of the main suppliers of F&A products to the UK.”

According to Rabobank, fresh fruit, vegetables and flowers account for £1,853 million worth of exports from the Netherlands to the UK, much greater than other export flows such as poultry and eggs which is valued at £643 million and sugar at £110 million.

“Although we still do not know what the British trade agreements will look like after Brexit, the cost of exports will undoubtedly increase,” adds Smit.

“Administrative checks at the border alone may lead to an extra charge of 5 percent to 8 percent. This is partly because F&A products are subject to veterinary and phytosanitary controls.

“Fresh products for which the UK has no alternative sources will, for the most part, most likely continue to be imported in the same manner. Dutch exporters might face increased competition from third countries in British markets. This may have a negative impact on Dutch exports of globally traded commodities, such as meat, dairy products, and sugar.”

The UK imported food and agriculture products worth £47.5billion in 2016 , 71% of which were from EU nations. This included huge volumes of Dutch and Spanish fruit and vegetables.

Brexit opportunities for Dutch companies

Smit also details some potential benefits and opportunities Brexit presents to businesses in the Netherlands, although this will not necessarily be the case for agri-food and fresh produce industry.

“Greater barriers to trade will probably make importing from the UK more expensive after Brexit. This substantially improves the competitive position of Dutch and European companies on the continent.

“As well threatening the Dutch economy and business community, Brexit could also offer opportunities for some companies in the Netherlands. Those supplying products and services currently imported into the EU from the UK, for instance.

“In addition, the Netherlands is well placed to attract non-EU companies which currently use the UK as their gateway to Europe. For them, it is a logical and relatively appealing alternative thanks to Rotterdam’s status as Europe’s largest seaport, high-quality hub airport Amsterdam Schiphol, a good physical and digital infrastructure, a favourable geographical position and a well-educated, multilingual workforce.”

Ending speculation 

Meanwhile, director general of the Food and Drink Federation, Ian Wright, has issued a statement today (Mar 29), following the official triggering of Article 50, saying that he’s looking forward to ending speculation and getting into the detail of what leaving the EU actually means for the food and drinks industry.

“The triggering of Article 50 provides us with a definitive timeframe for the UK to exit the EU and the clock is ticking. We hope this means we can move swiftly from the realm of speculation into one where real issues are being resolved,” he says.

“The results of the negotiation will have lasting implications - for our people, businesses and economy. Food is at the heart of our culture, identity and security. It is vital that the Government prioritises food and drink.

“FDF on behalf of manufacturers, alongside our partners across the food chain, will work tirelessly to help government to secure the best possible outcomes on future trade, access to the right workforce, regulation and ensuring a seamless border with the Republic of Ireland.”


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