The implications of a ‘no deal’ Brexit were under discussion at the AHDB Grain Market Outlook conference, with a panel comprising members of the cereals and oilseeds supply chain.
Alex Waugh, director general of Nabim said a 40-50 per cent tariff of about €172/t (£151.03) would apply to flour exported from the UK meaning effectively the importer would not buy the flour for economic reasons. For bakery goods the tariff would be around 15p/loaf, he said.
“If the UK position is that the reverse would apply to imports from the EU, it gives us an opportunity to replace those imports but if the UK decided not to apply tariffs, we would lose exports but not be able to replace imports so there would be a loss of output applying to flour, mixes and bakery goods.”
However, there may be ways to mitigate the effects of such a scenario, said Mr Waugh. “In the event of tariffs, there are systems that can be used concerning input processing and output processing relief. If a product is exported, processed and reimported, a reduced tariff is applied. I think we could use this to reduce the tariff by around 75 per cent. In the short term it would be a possibility but we have a lot of work to do and need the support of Government.
“It would also need to pass an economic test to confirm it is in the economic interest of the countries concerned. I think that both would agree but we couldn’t set it up until we have left the EU.”