UK agrifood tariffs a €400m threat Irish dairy exports

Dairy Industry Ireland, the Ibec group that represents primary and secondary dairy processors in Ireland, has said that the UK government needs to appreciate the severe economic, social and environmental damage on the island of Ireland from the possible application of agrifood tariffs.

It comes following the announcement at the UK National Farmers Union annual Conference in Birmingham by Michael Gove, Secretary of State for Environment, Food and Rural Affairs of the United Kingdom, that the UK will apply tariffs to food imports to protect British farmers in a no-deal scenario. Recent CSO figures put milk intake from Northern Ireland to the South for manufacture at over 804 million litres for 2018.

Commenting on developments Conor Mulvihill, Director of Dairy Industry Ireland said:

“Milk exports south of the border are of vital importance to the economic viability of the dairy industry in Northern Ireland and there simply is not the processing capacity in Northern Ireland or in fact the rest of the UK to handle this milk.

“With less than 900 hours remaining to the proposed Brexit day, it is vital a resolution is reached and a strong backstop protecting dairy trade and regulations on the island of Ireland is maintained.”

DII studies have shown that for the single product of cheddar alone, the tariff threat is about €155 million, with a threat of about €400 million on overall dairy exports to the UK.

Mr. Mulvihill continued: “We are engaging closely with our colleagues in Food Drink Ireland, to push for a tariff stabilisation fund and state aid flexibilities to help agri-food exporters and farmers offset the impact of UK tariffs in the event of a ‘No-deal’ Brexit. 

“We are also working across government to positively look for solutions that will deliver for Irish dairy in both a no deal and a deal scenario. The stakes are very high with our economic modelling showing both prices rises and severe trade losses in crash out scenarios.

“Even if the UK use a Tariff Rate Quota system on products such as dairy to mitigate disruption- this will put the Irish dairy industry competing toe to toe with larger rival such as New Zealand and the US for dairy market share in the UK market.”