Industry steels itself for Brexit fallout

A week has passed since the British public voted to leave the European Union, triggering in the process a political earthquake of epic proportions. Inevitably, perhaps, the fallout from Brexit has thus far been largely dominated by internal party politics, but as the days and weeks pass attention will turn to the specific political and economic ramifications of Britain’s exit from the EU as they affect businesses and the British public.

As Footprint highlighted repeatedly into the run up to the referendum, food is among the sectors whose trade and governance is most intertwined with Brussels. Not only is trading with other member states of critical importance to many UK food businesses, but a raft of regulations covering everything from employment rights to food labelling are currently passed down by the EU.

The reaction from trade bodies to the vote has highlighted just how urgently the industry is seeking clarity on what happens next. The British Hospitality Association convened a meeting of its members earlier this week to begin the process of framing a plan to ensure it has a seat at the table on all negotiations including issues it considers of particular importance, namely taxation, immigration and regulation.

The Food and Drink Federation was one of the few trade bodies to express outright disappointment at the result of the vote, based on a poll of its members in March that showed 70% support for Britain to remain in the EU. "Now FDF will work on behalf of our members and all those across our industry to find a way through this very challenging period that we face,” said director general Ian Wright. “We'll focus on working with the Government to understand what this means for trading, market access and regulation to secure the best outcome for British food and drink manufacturing business and their customers."

With analysts predicting that food prices are set to rise in light of Brexit, the BRC said that the priority of retailers in the short term would be to ensure the minimum additional costs of importing EU goods into the UK for sale to customers. “A prolonged fall in the value of the pound will impact import costs and ultimately consumer prices, but this will take time to feed through,” said BRC CEO Helen Dickinson. She added that the Government should aim to ensure that the trade benefits of the Single Market are replicated in the UK's new relationship with the EU.

Farmers arguably face the greatest uncertainty as they wait to hear how the UK Government plans to replace the subsidies received under the Common Agricultural Policy. The NFU has moved swiftly to fill the policy void by setting out a list of priorities for the government in its negotiations with Brussels. These include ensuring farmers and growers can get the necessary supplies of labour, both seasonal and full-time; to build a British agricultural policy which is as simple as possible, adapted to the UK’s needs and that guarantees parity of treatment with European farmers; and regulations and product approvals that are proportionate and based on risk and science.

Civil society groups, meanwhile, have urged that the Government clarifies which pieces of health and environmental legislation it plans to retain and uses the opportunity of Brexit to rethink local and national food policies. “The Government now has no excuse for hiding behind others over inaction on the issues that will affect our country and its citizens,” said Ben Reynolds, deputy coordinator of Sustain. “Its first opportunity is to be brave and bold in the forthcoming childhood obesity strategy and release this as a priority.”

With negotiations over the terms of Brexit set to begin in the autumn, the food sector will be watching developments more closely than most.

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