Dairygold CEO: Tariffs cost will be on producer without support
Jim Woulfe, the CEO of Dairygold, has warned that the costs of post-Brexit tariffs on cheddar will be on the producer if adequate support mechanisms are not put in place.
Speaking on RTE’s Prime Time, Woulfe highlighted that tariffs on cheddar going out of the country could be as high as €50 million – costs the group can’t carry.
“Quite clearly, the first port of call would be to put that cost on the consumer. But the UK is already a very competitive market,” said Woulfe, suggesting that offsetting the cost to British consumers is not an option.
We are a low-margin business. Ultimately, if there is not support mechanisms put in place, the cost goes back to the producer.
Woulfe also warned that, in a “worst-case scenario”, and World Trade Organisation (WTO) tariffs apply after Brexit, then there will be the possibility of job losses.
“There will be costs, and either the producer takes less, or we shrink our business,” he said.
Woulfe explained that WTO rules would apply a tariff of €1,671 on a tonne of cheddar – 50% of the value of a tonne entering the UK.
We export 30,000t of cheese annually; applying that tariff is €50 million, which is difficult to contemplate.
He added that finding new markets for cheddar was not a viable option either, highlighting that the product consumed in very few other parts of the world apart from the UK.
“The reality is that cheddar is for the British pallet, that is where the market is,” he said.
Woulfe explained that the main cause for consternation among the dairy industry was uncertainty over what the eventual outcome would be.
Now we are watching news bulletins morning, noon and night to get the next iteration of what is happening.
“We need clarity and certainty that supports will be in place if we have to alter our product portfolio,” he said.
“We are hoping for the best, but you can’t run a business on hope,” he added.