Brexit bill of more than €287 million for Irish dairy in event of no deal

A Brexit trade agreement between the UK and EU must be reached before the end of the year –  or Irish dairy exports would be levied with tariffs amounting to more than €287 million a year, according to the Irish Cooperative Organisation Society (ICOS).

The co-op association was reacting to the announcement made this afternoon, Tuesday, May 19, by the UK government, on its post-Brexit tariff regime.

The UK Trade Secretary Liz Truss announced the new UK Global tariff plan today and which will be applied on all imports following the country’s exit from the EU customs union and single market at the end of the year.

If the EU and UK fail to reach a deal on their post-Brexit relationship, Irish exports will equally be subject to these new tariffs, which would not only impose a significant cost on agri-food businesses but also severely hamper Irish firms’ competitiveness and position in the UK market, ICOS warned.

Under the UK government’s incoming tariff plan, announced today, a duty of £139 (€155)/100kg would be applied on imports of cheddar cheese, while £158 (€177)/100kg would be applied to butter imports.

These tariffs are significantly higher than those planned for under the UK’s no-deal preparations.

The UK remains a top market for Irish dairy products, with over 138,000t of cheese and 42,000t of butter exported to the UK in 2019.

Without a deal between the EU and UK, next year these exports alone would incur a tariff bill of upwards of €287 million, it was stressed.

ICOS EU affairs executive, Alison Graham, said: “The Irish dairy sector has taken hit after hit this year, with Covid-19 creating additional new barriers to international trade and imposing significantly higher costs on exporters, with the implications to be felt for months, if not years to come.

“On top of this, additional tariffs of 25% being applied on our dairy exports to the US, with a cost of more than €50 million for the dairy sector.

Irish dairy cooperatives and farmers simply cannot take another hit.

Graham stressed that reaching a trade agreement with the UK “must remain a top EU and national priority”, adding that “quick solutions must be found” to break the current impasse in talks.

“The announcement today is an unwelcome reminder of the urgency of the discussions and the importance of avoiding and distraction or complacency around this issue,” the ICOS executive concluded.