The co-operative warned dairy products could become a luxury after the UK leaves the EU
Speaking at an event held today at the London School of Economics (LSE), Arla warned non-tariff barriers to trade and restricted access to labour could mean dairy products become a luxury for British consumers after Brexit.
‘The impact of Brexit on the UK dairy sector’ report found any friction and limitations on access to key skills will mean less choice, higher prices and potentially lower food standards.
Arla suggested there were three possible outcomes from a ‘dairy dilemma’ – it would become more difficult to import dairy products from Europe leading to shortages, escalated pressure on costs which would increase consumer prices or ramping up production and cutting costs, at the expense of world-leading standards.
Challenges included increased custom inspections at UK ports, adding delays and additional costs, more veterinary checks while vets from elsewhere in Europe return home and rising costs as EU national lorry drivers and workers return home.
And even with a ‘softer’ Brexit, Arla warned these issues would remain.
Ash Amirahmadi, Arla Foods UK managing director, said its farmers were already balancing keeping costs down with maintaining standards.
“There is no margin to play with here in the value chain,” he said.
“Any disruption means that if we do not get the practicalities of Brexit right we will face a choice between shortages, extra costs that will inevitably have to be passed on to the consumer or undermining the world-class standards we have worked so hard to achieve.”
He added the dependence on imports meant disruption would have a big impact.
“Most likely we would see shortages of products and a sharp rise in prices, turning every day staples, like butter, yoghurts, cheese and infant formula, into occasional luxuries.
“Speciality cheeses, where there are currently limited options for production, may become very scarce.
He added Brexit might bring opportunities to expand the UK industry in the long term but milk production cannot simply be turned on and off in the short and medium term.
“Increasing the UK’s milk pool and building the infrastructure for us to be self-sufficient in dairy will take years.”
“To protect the British public we are calling on both sides in the negotiations to be pragmatic and sensible as they address the practicalities of Brexit, allowing us to have frictionless customs arrangements and ready access to key labour in the years ahead.”