A ‘Hard Brexit’ could result in loss of 32,000 meat industry jobs

A new report on the potential impact of a ‘Hard Brexit’ on the European meat market makes for grim reading for Irish livestock farmers and everyone in the Irish meat industry.

The report has projected the likely effects on the industry in the event of a ‘no deal’ scenario between the EU and UK, where the UK leaves the single market and customs union without a transitionary period or trade deal in place.

The document was commissioned by the European Livestock and Meat Trades Union (UECBV), the EU representative body for national federations representing the meat industry, meat traders, and livestock traders and markets.

In such a scenario, World Trade Organisation (WTO) tariffs would come into effect; the meat sector – which faces the highest tariffs of all sectors – would be hit with an estimated average tariff rate close to 50% and exceeding 100% for some products, according to the document.

The same report details that the export costs – imposed by tariff barriers, customs and veterinary checks and increased transport costs – would reduce meat exports from the EU to the UK by up to 84% for beef, 76% for sheepmeat and 48% for pigmeat – according to conservative estimates.

Such a trade reduction would lead to a surplus of EU beef and pigmeat, having a major impact on market price. The value of EU production of meat would take a serious hit and result in a structural reduction in the EU beef market price of over 8% and the pigmeat price by over 7%.

This price shock would reduce the value of EU production of beef by approximately €2.4 billion in the short run, and of pigmeat by over €2.3 billion, the document reveals, adding that a loss of at least 32,000 jobs would also be the result of such a scenario.

The paper notes that Ireland – which takes up easily the largest of the UK’s share of intra-EU meat exports with a 56% stake – is most exposed to the problem, followed by Denmark, with a 25% stake.

The document also warns that the magnitude of the shock of a Hard Brexit would be a lot stronger than that caused by the Russian food import ban in 2014, and it would also be far more difficult to find alternative markets for diverted products.