No-deal Brexit could cost Scottish food and drink industry £2 billion and push firms to collapse
A no-deal Brexit could cost Scotland’s food and drink industry £2 billion and push many businesses over the edge, an industry leader has warned.
James Withers, the chief executive of Scotland Food and Drink, said the ongoing uncertainty over the UK’s future relationship with the EU means some businesses are already stopping selling products there.
The Covid-19 pandemic has also caused “huge losses for businesses who are way more fragile going into 2021 than they otherwise would have been”, he said.
He warned a no-deal Brexit on top of that would be an “act of huge economic negligence” that could push some firms out of business.
Scotland normally exports about £1.2 billion worth of food to the EU every year, he said, adding having to resort to World Trade Organisation terms will be a “living nightmare for a lot of food and drink businesses”.
Mr Withers told the PA news agency: “The impact of tariffs could effectively end most of our red meat exports to Europe.
“Scotch lamb would face tariffs of between 40% and 50%, beef over 80%.”
With more than 80% of Scottish red meat exports going to Europe, he said this trade could be “be wiped out overnight” after January 1.
He added: “Even for products where the tariffs are a lot lower, like seafood, that tariff could make the difference between profit and loss.
“This would be a nightmare in any normal year, on the back of a pandemic which has cost – we believe – the Scottish food and drink sector about £3 billion in lost sales this year, it could push some businesses to the edge.”
Scotland Food and Drink was part of a group of organisations that wrote to Prime Minister Boris Johnson requesting a six-month grace period be put in place.
They said this would mean businesses would not immediately feel the impact of the additional paperwork and checks that selling to Europe will bring after the transition period ends.
Mr Withers said there has been no formal response from Mr Johnson but ministers from both the Scotland Office and the Department for Environment, Food and Rural Affairs (Defra) have told him the idea is a “non-runner”.
He said: “At this stage, the industry cannot be ready for January 1, the raft of new checks there will be, the millions of new bits of export paperwork.
“We do not believe the industry, the haulage sector, the ports themselves, the IT systems are able to cope without a grace period.
“Without that grace period we will face massive disruption, even if they do cobble a deal together.”
Mr Withers added: “We have had a transition period which has been haunted by not knowing what we are transitioning to. And we still don’t know.
“Some businesses will stop exports this weekend because of the uncertainty. And it does seem crazy.
“Telling businesses to prepare is fine but when you don’t know what you are preparing for, I don’t honestly know what the government expect people to be doing.”
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