WTO tariffs would have a ‘crippling effect’ on beef

World Trade Organisation (WTO) tariffs would have a “crippling effect” on any trade going between EU countries and the UK, Bord Bia’s Joe Burke has said.

Addressing the crowd at last week’s Irish Grassland Association (IGA) National Beef Conference, the Bord Bia livestock sector manager said the UK market is of significant importance to the Irish beef industry.

In 2016, 50% of Ireland’s beef exports were destined for the UK – valued at €1.2 billion.

With 50% of our beef exports going into the UK market, Burke explained how we are significantly impacted by any changes in the policies and potential tariffs that might ensue during Brexit negotiations.

If a deal between the EU and the UK is not agreed, he said: “WTO rules would ensue and tariff rates on beef would be equivalent to €3/kg plus 12.8% of value; a charge of 65%, on average, across the whole carcass.”

The need to diversify

The UK has an annual import requirement of approximately 400,000t of beef, of which Ireland supplies almost 70%, he said.

Ireland is the only imported beef supplier to the three largest UK supermarkets: Tesco, ASDA and Sainsbury’s, as well as to McDonalds and Burger King.

This policy by many ‘blue chip’ customers to stock “British and Irish beef” is based on reputation, compatibility, quality assurance and consumer acceptance.

They (British and Irish beef) are seen as alternatives to one another. In other words, Irish beef is seen as a direct alternative to British beef. In the minds of most British consumers Irish beef is seen as local.

However, with 50% of Irish beef exports going into the UK, the over-reliance and need for diversifying is quite evident.

“The UK beef market has the highest price in Europe and it makes sense for us to continue to supply this market as much as we possibly can; albeit that we don’t want to be too reliant on it,” Burke added.

Continental EU accounted for 45% of Irish beef exports, and the international market, while still a small percentage, grew from 2% in 2015 to 5% in 2016.

“In total, 30,000t of Irish beef were exported outside of the EU in 2016. From a very low base, that has seen significant growth in the last few years.

The big hope would be getting direct market access to China.

With 18 months now to see how Brexit negotiations develop, a good outcome from an Irish beef perspective, according to Bord Bia, would be one which:

  • Maintains preferential access to the UK market;
  • Protects the UK market from the impact of low-priced imports;
  • Maximises the EU budget and resources available to the CAP;
  • Allows any alterations to trade to be phased in over a long transition period of five to 10 years.