THE PROSPECT OF a no deal Brexit became more likely this week as Theresa May’s proposed withdrawal deal with the EU suffered a thumping defeat in the House of Commons.
The government here said in a statement released immediately after that vote that it would intensify preparations for a disorderly Brexit.
France, too, took immediate action, with the country’s interior minister activating a plan for a no deal exit and providing for €50 million of investment in French ports and airports.
From the consumer’s point of view, the impact of a no deal Brexit will be “potentially grisly,” the Northern Ireland Food and Drink Association’s CEO Michael Bell told TheJournal.ie.
What I mean by that is it’s impossible to completely predict what might be in short supply and indeed what might be in ridiculous oversupply.
The impact of Brexit was already being felt across the North, Bell said. In the years since the vote “a considerable amount” of essential migrant workers had already left, due in part to the chilling effect of the expected exit from the European Union and concerns about whether they’d still be welcome after Brexit.
Speaking at the National Manufacturing and Supply Chain Conference in Dublin Bell described no deal as a “disaster” for the agri-food industry north and south of the border. His organisation is strongly anti-Brexit and members want trading conditions to stay “as close to what they are today as possible”.
In a worst case scenario a return to World Trade Organisation (WTO) rules would mean an enormous hike in tariffs – the taxes imposed on imports and exports – for food producers. The tariffs average at 22% but are far higher on some goods.
Using flour as an example, Bell explained that there are only three flour mills on the island of island. Of that number the two in Belfast are the only ones that supply bulk commercial flour, delivering to bakers north and south.
“60% of the output of the two mills in Belfast goes to the Republic of Ireland,” he said. “The WTO tariff on flour is over 60% at today’s prices.”
An ESRI study published last year found that if tariffs were introduced and other trade costs also increased following a hard Brexit, the price of bread and cereals could rise by up to 30%, while milk, cheese and egg prices could increase by 46%.
A hard Brexit would increase the cost of living for all households in Ireland by 2% to 3% – an annual increase of €892 to €1,360 per household, that study found. Costs would rise most for lower-income households.
The disruption to trade caused by tariffs, checks and transport issues could have a massive distorting effect on the array of goods available at your local supermarket or convenience store, Bell said.
“I know empty shelves makes great column inches. The reality is I think it’s going to be more distortion.
“The things that you might want might not be there or they might be there at a price you don’t want to pay anymore, and there might be other things there in glut and because they’re in glut the price has been reduced to try and get them moved.
I would describe it as more distortion than a shortage. Are we going to be short of food on the island of Ireland? No we’re not.
Bell said his organisation would be stepping up lobbying activities in the coming weeks amid continuing political turmoil in London.
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