U.K. Food and Drink Sector Calls for Post-Brexit Assurances

U.K. food and drink industry groups are set to call for barrier-free post-Brexit access to the European Union’s single market and labor, warning that cutting off either could threaten one of the country’s biggest drivers of economic growth.

Companies such as Diageo Plc and Nestle SA along with trade associations from across the sector are scheduled to give evidence on the impact of Brexit to the Business, Energy and Industrial Strategy Committee of Parliament on Wednesday. Written submissions published Tuesday underline the challenges facing the U.K. in trade talks with the EU after the two parties reached an agreement on initial divorce proceedings, including the U.K.’s bill for leaving the bloc.

A no-deal scenario could pose a significant threat to the industry and the U.K.’s exports, the Food and Drink Federation said in its prepared comments. World Trade Organization tariffs -- the fallback option if there’s no agreement by the time the U.K. is set to leave the EU in 2019 -- are often significantly higher than for other goods, the federation said. The British Beer & Pub Association underlined the importance of migrant labor to the EU for bar operators as well as makers of food and drink.

“WTO tariffs could significantly increase the cost of food and drink imports,” the Association of Licensed Multiple Retailers, which represents restaurants and bars, said in written evidence submitted ahead of the session. “In the event of no trade deal being agreed with the EU, we would welcome a government commitment to eliminating all trade tariffs on food and drink products around the world.”

Davis’s Optimism

Britain wants a deal with the EU that includes the best parts of the bloc’s agreements with Japan, Canada and South Korea, along with financial services, Brexit Secretary David Davis has said, showing optimism a pact can be struck within a year. Food and drink businesses follow the chemical and pharmaceutical industries in setting out their priorities for the talks.

Individual companies gave differing recommendations for the Brexit proceedings, with the U.K. arm of Italian sweets maker Ferrero saying it supports a transition agreement if a permanent deal cannot be agreed and ratified in time. Tate & Lyle Sugar, part of American Sugar Holdings, said the implications of Brexit were overall positive for its business as the U.K. can now adopt a “more balanced” policy that will help British cane refiners compete with EU beet sugar producers.

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