Scottish food and drink firms ponder future EU exports as Brexit hampers trade

Many Scottish food and drink suppliers plan to decrease or stop exports to the EU amid the regulatory fallout from Brexit, an industry survey suggests.

Britain’s departure from the European Union and the pandemic have combined to create a series of issues and obstacles to trade which manufacturers across the food and drink landscape are having to tackle, according to the study by Johnston Carmichael and the Food and Drink Federation (FDF).

The survey quizzed business leaders at some of the UK’s top food and drink producers on how they were coping while balancing increased costs, additional administration and bureaucracy a year on from Britain leaving the EU.

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Issues around exporting and importing goods were prominent with many respondents stating they intended to decrease or stop EU exports all together.

Adam Hardie, business development partner and head of food and drink at Johnston Carmichael. Picture: Jakub Iwanicki

Suggestions for the UK government to improve conditions were collected with respondents recommending simplifying the rules and paperwork and introducing free trade with the EU to assist with exports.

The survey demonstrated that restrictions around free movement have been felt across the industry with businesses reporting they have experienced fewer EU workers being available.

The impact on the supply chain was noted with businesses highlighting logistics as a key supply chain risk and admitting they were struggling with supply issues or lack of availability of materials. Many bosses stated that inflation or rising costs have also impacted their businesses.

Adam Hardie, business development partner and head of food and drink at Johnston Carmichael, said: “Supply chain disruption, increased bureaucracy, shortages of HGV drivers, border control changes and the reduction in both skilled and migrant labour are just some of the challenges which businesses are having to overcome.

“The aim of the survey was to take the key themes of profitability, innovation, growth and importing and exporting and assess how Scottish food and drink businesses of all sizes now view their prospects against the backdrop of the unprecedented circumstances created by Brexit and by the pandemic.

“Despite the obstacles, it’s very encouraging that the business leaders surveyed believe the UK is an attractive economic environment. For those seeking investment to enable growth, food and drink continues to be an attractive sector for private equity, high net worth individuals and overseas buyers.”

David Thomson of the FDF added: “These headwinds mean that governments across the UK must remain alive to the challenges the food and drink industry continues to face.”

Doug Baxter from Stewarts of Tayside said: “Brexit has had a negative impact on our business. Sourcing of labour has become expensive and much more difficult with no freedom of movement.

“We rely on a seasonal migrant workforce, which is diminishing by the year. Sourcing inputs and parts has also become more difficult and more expensive.”

Dave Grant from Fierce Beer said: “We have lost 80 per cent of our export market as costs to import for our partners have been too much to be bearable.

“We have also had a 25 per cent increase on raw materials. EU countries are no longer looking for our products due to the associated cost hike.”

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