European meat industry poised for catastrophic impact of a hard Brexit
Trade down 84%, 32,000 job losses, annual beef production down $3.9 billion, annual pork production down $3.7 billion… these are just some of the catastrophic forecasts made in a recent report about the impact that a hard Brexit scenario would have on the European meat industry.
- Trade collapsing — an 84% drop in beef trade between the EU27 and UK
- Market price shock — the value of EU pig meat production would drop by €2.3 billion, and beef by €2.4 billion
- Job losses — at least 32,000 job losses across the EU at farm level, through processing and distribution
- Higher WTO tariffs than any other sector
- Additional costs of veterinary checks, in addition to the customs checks faced by all goods
- Major disruption to supply chains and chaos for just-in-time fresh meat delivery systems.
‘Crisis — The EU Meat Industry in a Hard Brexit scenario’ report modelled the impact of a hard Brexit on trade between UK and EU for meat products. It found that increased costs imposed by tariff barriers, additional veterinary checks and increased transport costs would lead to a reduction of trade in meat from the EU to the UK by up to 84% for beef, 76% for sheep meat and 48% for pig meat. The price shock will decrease the value of EU meat production by €2.4 billion for beef and €2.3 billion for pig meat.
The report found a hard Brexit scenario will have a profoundly negative impact on the EU meat market, given the major trade flows between EU27 and UK. As the UK has a principally deficit meat market, the negative impacts will be felt throughout EU. As meat processing involves the disassembly of carcass to a myriad of consumer cuts and products, it thus has to find markets for all parts of the carcass and therefore the impact will be transmitted throughout the single market to affect all countries, even those with limited direct trade with UK.
The report concludes that solutions will be needed to minimise disruption and disaster for the European meat industry, recommending:
- A timely and sufficiently long transitional period to allow businesses to adjust to new arrangements
- A future trading relationship that creates minimal burden for business, especially SMEs, and maintains current trading conditions as much as possible
- Continued regulatory convergence between the UK and EU
- Market support mechanisms including increased market access, internationally simplified transit systems and vital investment in port facilities.
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