By Fintan McConnell, Product Manager Food Ingredients.
Only six months in and already 2020 is proving to be a year that no one will ever forget. From political global turmoil through to the COVID-19 pandemic. It is easy to overlook, but unfortunately Brexit has not gone away and is a process that is still very much in play. Though technically speaking Britain left the EU on January 31st 2020, the reality is that the UK’s membership remains in place until the end of the year. The infamous, transition period. Thus far no agreement has been found between the EU and the UK government. means that there is a very real chance of the UK leaving the EU without any trade deal. The UK has made it clear that there will be no extension period to allow for further trade talks beyond December 2020. Negotiating ploy, bluffing or the stark reality?
A hard Brexit looks likely
If this is really the end game and no deal is struck, WTO tariffs will automatically apply to all trade between the UK and EU from the 1st January 2021. By any yard stick this will be dramatic with the likelihood of major delays. With significant commercial implications for exports and imports between the UK and Europe. For the food industry here in Ireland it is the nightmare scenario. Not only will these tariffs and delays in transportation apply to the finished product but they will also affect any food ingredient or raw material that is imported.
Presently Irish food exports to the UK are worth €4.4 billion. This represents 34% of the total amount exported. In turn, the UK exports £14.2 billion of food to the EU, this is 60% of their total food exports. Of which £4 billion goes to Ireland. Irish as well as UK based food producers have sought to diversify their export portfolios. However, progress made has been greatly hampered and delayed by the arrival of COVID-19. Many of these food producers are also importing food ingredients, often from the UK or the EU. It is now critical for food producers to reassess their ingredient and raw material sources and where necessary implement change in advance of year end.
Is your food ingredients provider exposed?
At NCC Food Ingredients we may not be able to assist Irish or UK based food manufacturers in relation to exporting to new markets. However, we can assist with sourcing food ingredients. With registered companies in both the UK and Ireland as well as secure transportation and warehousing networks, we are able to provide raw materials to both the UK and Irish markets regardless of the final outcome of Brexit. If you would like to know more about how NCC Food Ingredients can assist your company? Fill out the form below and we will be in contact.