Speaking during the EDA Annual Convention being held in Dublin this week, Paul Vernon, Dairy UK Chairman and CEO of Glanbia Cheese commented:
“The dairy sector needs answers on Brexit. Business leaders need to be able to plan for the medium to long term, and in order to do that we need to know not only if there will be a transition period but how long it will be, and what exactly it entails. This continued turmoil will simply not help UK businesses and will certainly not help the dairy sector.
Arla Foods joined farmer organisations from the United Kingdom (UK), Denmark, The Netherlands, Re-public of Ireland, France and Germany to call for the UK government and the European Union to pull out all the stops to avoid a No Deal BREXIT.
The call was made during the ‘Beyond Brexit: Farming for our Future’ conference in Whitehall, London on 25 October, which brought together farmers, government officials and businesses from across the UK and five European countries for the first time.
“It is important that the future relationship between the UK and EU remains open and farmers on both sides of the channel have a level playing field.” said Peter Giørtz-Carlsen Executive Vice President of Arla Europe.
With BREXIT negotiations stalled, the prospect of a no deal is very real. Arla has consistently advocated against a so called hard BREXIT, putting forward a positive solution which promotes free trade and high animal and food safety standards.
At an event held at the London School of Economics (LSE), Arla Foods will warn that if the findings of a LSE report prove true, non-tariff barriers to trade and restricted access to labour after Brexit will leave British consumers facing a dairy dilemma which could see the availability of butter, yoghurts and cheese become restricted.
The Government’s White Paper on the UK’s future relationship with the EU sets out proposals to ease trade between this country and Europe. But this is still to be agreed with the EU, and as is identified in the report from the LSE, The impact of Brexit on the UK dairy sector, any friction and any limitations on access to key skills will mean that UK consumers pay the price through less choice, higher prices, and potentially lower food standards.
Arla Foods will say that the issues identified in the LSE report mean a dairy dilemma in the UK, with three possible outcomes:
- That it will become much more difficult to import dairy products from Europe, leading to a shortage both of dairy staples and particularly of products such as speciality cheeses, where domestic supply is constrained by limited production capacity in an already tightly managed supply chain.
- Escalating pressure on costs, and ultimately increased consumer prices for dairy goods. Current dairy imports include cheese, butter, butteroil, whey, buttermilk and fermented products, yoghurt, concentrated milk, powders, milk and cream, infant formula and ice cream meaning that the impact could be widespread.
- That ways are found somehow to ramp-up production and cut farm costs, which in the short-term at least would inevitably undermine the world-leading standards of our dairy industry – something neither farmers nor consumers would accept.
This is in addition to costly impacts throughout the supply chain, problems that could be exacerbated by a shortage of vets, lorry drivers and farm workers post-Brexit.
I förhandlingarna mellan Storbritannien och EU fokuserar man nu på hur handelsförbindelserna ska se ut i framtiden. Det är ett kritiskt skede och Arla ökar sitt lobbyarbete och sina förberedelser för att hantera effekterna av Brexit.
Arla har definierat tre tänkbara handelsscenarier som man förbereder sig för. Ett frihandelsavtal utan tariffer för mejeriprodukter, handelskvoter utan tariffer genom Världshandelsorganisationen och ett ”inget avtalscenario”. Arla bedömer att det mest sannolika scenariot är att Storbritannien och EU kommer att nå fram till ett frihandelsavtal.
At the IDF World Dairy Summit taking place in Belfast this week, Tomas Pietrangeli, Managing Director of Arla Foods UK has spoken on the opportunities and challenges posed by Brexit to the UK dairy industry.
In a speech given to the global dairy community Pietrangeli said. “The farmers that own Arla and the dairy industry as a whole need to know urgently what the government plans look like for the future of food and farming. That means the early publication of a new agriculture policy next year. Any delays will be detrimental to our industry due our long term planning cycles.”
Pietrangeli suggested that the post-Brexit trade deal is likely to be a complex part of the negotiation, noting that the two year status quo to avoid a cliff edge is reassuring but it’s not quite enough to plan well.
Dairy UK has published the ’White Paper’ report for 2017 which details the ’game changing’ opportunities and challenges which the industry is facing over issues such as Brexit and consumer confidence in dairy foods.
Dairy UK have called Brexit the most defining issue the industry has faced for generations, with the White Paper 2017 identifying what Brexit needs to deliver to safeguard the future interests of an industry that employs more than 70,000 people, and has an overall turnover of nearly £28 billion.
On prospects for the industry, the White Paper reveals that an increasing demand for dairy globally is putting world milk production on an upward trend.
On the issue of Brexit, Dairy UK says;
- Continued trading agreements with the EU without tariff and non-tariff barriers will mean massive export and growth opportunities – failure will damage exports and reduce demand for dairy;
- The worst outcome from Brexit would be a return to WTO rules;
- An unhurried transition period would give the industry the chance to adapt and take advantage of the opportunities Brexit creates;
- Access to skilled and unskilled labour is vital – failure to maintain access will drive up operating costs, with a major impact on margins;
- UK dairy farmers should not be disadvantaged compared with their European neighbours;
- The Northern Ireland border issue should be resolved by creating a frictionless and seamless border regime that could be a blueprint for future arrangements with the EU.
The White Paper
Når Storbritannien i 2019 træder ud af EU, betyder det en ny virkelighed for Arla, som har sit største enkeltmarked i landet. Derfor er det vigtigt at kende de nye samarbejdsvilkår i detaljer og samtidigt vigtigt, at forklare virksomhedens interesser overfor de involverede EU-politikere og embedsmænd. På den baggrund har Arla pr. 1. august etableret et særligt Brexitkontor, som ledes af Helena Fagraeus, der hidtil har arbejdet med forskellige strategiske og kommercielle forhold i virksomheden, skriver Maelkeritidene.
– Jeg skal lede arbejdet med de forskellige scenarier samt evaluere vores forretningsstrategi i Storbritannien for at sikre, at Arla står stærkt efter Brexit, siger Helena Fagraeus til ejerbladet.
– Ved at vurdere hvilken betydning Brexit kan få for forskellige scenarier kan vi definere mulige veje fremad for Arla, siger hun og påpeger samtidigt, at der vil være fokus både på samhandel og adgang til det britiske marked samt på at sikre Arlas britiske andelshavere lige vilkår i konkurrencen med de øvrige mælkeproducenter i EU.
“It is vitally important that the UK dairy industry is recognised and prioritised during Brexit negotiations”, Dr David Dobbin, Chairman of Dairy UK, said speaking at Dairy UK’s Brexit and Beyond industry seminar in London and at the organisation’s annual dinner.
Dr Dobbin said it is in the national interest for dairy to be given due prominence during the Brexit process. He said: “The importance and relevance of dairy must not be forgotten or traded to the benefit of other sectors.”
Dr Dobbin told delegates that the dairy industry in the UK sees opportunities as well as threats in Brexit but everyone wants stability. He said the UK government and all political decision-makers must ensure that: trading arrangements with the EU without tariff and non-tariff barriers are continued; the relationship with the EU is clarified before negotiating free trade agreements with third countries; there is continued access to skilled and unskilled labour; any review of existing regulations or the introduction of new regulations will not create non-tariff barriers; UK farmers are not disadvantaged compared to their European neighbours.
”With 80% of UK dairy exports currently going to EU countries, any disruption to current agreements would have an extensive and costly impact on our industry.
We support the Government’s commitment to put in place a strong, swift and effective transitional process and urge them to avoid any kind of interruption to current trade agreements with EU countries or the creation of counterproductive tariff or non-tariff barriers.
What we absolutely cannot see is a fall back to WTO default terms as the tariffs within WTO arrangements would have disastrous consequences for dairy trade”, Dr Judith Bryans, Chief Executive of Dairy UK says.
Arla Foods UK’s managing director Tomas Pietrangeli has issued a call to the food and farming industry to work together to form one single voice around Brexit and he has committed to identify ways to make this happen.
He stresses th need for the food and farming industries to maintain access to labour and tariff-free access to the single market after Brexit.
He mentions that the UK dairy industry seeks to access foreign markets and that severe damage could be done if the deal negotiated does not have the industry’s needs at its heart.