No-deal Brexit ‘could reduce beef and cheese exports by 90%’
A no-deal Brexit could see a collapse of up to 90% in Irish beef and cheese exports to the UK, according to calculations conducted by a European lobby group.
Mella Frewen, director general of Food and Drink Europe, was speaking on the issue on RTE Radio 1’s Morning Ireland today (Friday, February 8).
“We have seen if you take the average price of, let’s say, a ton of beef leaving for the UK, you add the most favoured nation tariff according to the WTO rules.
“You’ll see this creates a much higher trade price which will have an impact on the volumes imported. And we reckon that the volumes exported in cheese and in beef will be reduced by some 80-90%.”
The director general added that this would have a domino effect on revenues for exporters and ultimately impact on jobs.
She reiterated that the impact in exports to the UK could be up to 90%, adding the effect that could be seen on revenues.
For beef we have a figure of around €780 million fall in revenues. For cheese it’s slightly less – around €400 million.
Frewen explained the manner in which such astronomical losses were calculated, taking the average price from current exports.
“We applied the most favoured nation tariff which is known to that price and then we looked at the knock-on effects of volumes exported using price elasticities that have been used actually by the European Commission.
“For every 1% increase in price that will have a knock-on effect of -5% export in volume – and they will have an impact on jobs.
I think in the Irish beef and cheese sectors, we were looking at something like 4,000 jobs lost. But I don’t want to startle people; they are a bit crude these calculations that we did.
However, the director general remained positive about the Irish industry’s response to the challenge, praising efforts to date and the impressive export figures in recent years.
“We have to look at other export markets. There are only in fact two ways to grow in this industry; one is by finding new trade markets; the other of course is innovation, making new products. And this is quite a fast-moving sector as well.
“But trade with Japan, trade with Canada; we’re now looking at New Zealand and Australia to make a free trade agreement there. There are more difficult agreements like Mercosur which are also being negotiated at the moment.
“But the industry is very resilient; the Irish industry is particularly resilient and they’ve done a really great job to find new markets.”
“There is an extraordinary support for this. I think people are beginning to understand what the backstop is all about; it’s more than just an Irish/British problem – it’s also a problem of the single market.
“Because the single market, the integrity of the single market, is something that must be protected at all costs.”