High tariffs on food will make for a thin time

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EU has trade deals with countries around the globe

By Molly Pollock

A  NEWSNET SPECIAL REPORT

Molly takes a look at her store cupboard, fridge and freezer to find out what Brexit could mean for household budgets.

In the chit-chat before the meeting began a few of us found ourselves reminiscing about the food we ate whilst growing up, what our parents put on the table. For most of us it was mince and tatties, stews, pots of homemade soup cobbled together from bones or chicken carcasses. And tripe (ugh!). Fish, usually haddock but sometimes other species from sea or river ­– like flounders or trout. Vegetables I remember as plentiful as my grandfather had an allotment, so no shortage of carrots, onions, peas, lettuce, cabbage, cauliflower, leeks, turnips and loads of potatoes that made stovies popular, especially towards the end of a winter week. Potatoes in some form (often deep-fried chips) were served with most, if not every evening meal. Potatoes were cheap and filling. And then there was rhubarb, sometimes gooseberries and a few wild strawberries.

With this in mind, and having read a number of articles about the effect a hard Brexit or crashing out of the EU might have on food supplies, with a recent article in the Times indicating Scotland would run out of food within a few days, I had a quick trawl through my store cupboard to see what foods I buy that might be affected. The result was highly interesting, and underlines the change in our diets in the last few decades – in fact, probably since the UK joined the EU.

Scotland’s relationship with European food

Membership of the EU, and an opening up of foreign package holiday and cheap airlines, has seen much of our traditional diet dropped in favour of Mediterranean and Asian fare. In my store cupboard I have Fusilli, Penne Rigate, Spaghetti and Trottole Tricolore – all from Italy, and Medium Egg Noodles (from Belgium), Long Grain Brown Rice (from Myanmar), Quinoa (Germany), Couscous (Italy), Arborio Risotto Rice (Italy) and Pearl Barley (Scotland). These have usurped the throne of the humble potato, still served but much less often, and now considerably more expensive.

Where you have pasta you need Passata (Italy), tomato puree (Italy) sundried tomatoes (Italy) and plum tomatoes (Italy) as well as pesto (EU), tuna (Mauritius), sardines (Morocco), caperberries (Turkey), black olives (EU), large green olives (Greece), Kalamata olives (Greece) and stock cubes (EU). A large pack of Craisins caught my attention. These are from the USA but made with N American cranberries. So they may or may not suffer a price rise – depending on that hyped-up deal with Trump. Behind the Craisins was a jar of pitted sour cherries (Spain), and a container with pinhead oatmeal from a mill in the Borders – the best oatmeal there is with a wonderful nutty flavour.

No point in pretending there will be no tariffs on food prices at the checkout

Not much from the UK so looks like, come Brexit and high tariffs, I’m going to have a thin time. Ah, but I hear you say, the recently cobbled together, now somewhat shaky) Chequers agreement proposes “a UK-EU free trade area which establishes a common rule book for industrial goods and agricultural products” after Brexit so everything foodwise is hunky-dory. Let me remind you that the EU does not accept free movement for goods without free movement for people: its four indivisible freedoms. So little guarantee that this agreement will be acceptable to the 27 EU members. Even if it is, the phrase ‘agricultural products’ is open to various interpretations, perhaps even meant to dupe. Does this include all foodstuffs, whether straight from farm, field or factory? Or is any foodstuff that is processed or manufactured omitted? If this is the case then prepare for a large hike in the amount of your weekly shop.

On to the fridge. It came as something of a surprise to find so many items from Germany – fruit yogurt and Greek yogurt, garlic sausage, air-dried salami, and Mozzarella cheese. France supplied some more air-dried salami and Camembert and Brie cheese. From Italy came Tortelloni and a piece of Parmegiano Reggiano. Other items were Feta (Greece), Gouda Cheese Slices (Holland), Mature White Cheddar (England), Gammon Steaks (Ireland) and Red Seedless Grapes (Egypt). Scotland was the source of mushrooms, eggs, sliced ham, cream, raspberries and strawberries.

As for vegetables, the potatoes were Scottish as were

Lidl moves a lot of Scottish branded potatoes

the carrots, the garlic was Spanish, and aubergines, courgettes, broccoli, cauliflower, tomatoes, cucumber, peppers, lettuce, cabbage, celery were all of unknown origin, though probably mostly from the glasshouses of Holland. A packet of spinach was marked British, and bags of mixed salad were either marked a mix of EU produce or mix of EU and non EU produce. So we rely heavily on imported foodstuffs to fill our fridges and cupboards. And that’s without starting on the freezer, though that has mainly Scottish meat (and some bags of that old staple friend – rhubarb).

Our diets have changed, and instead of eating mostly produce that we grow ourselves we now import much of what we eat…those of us that are lucky enough to be in that position. For the Westminster Government’s austerity policies have caused a horrific growth in foodbanks, children fed at breakfast clubs and reliant on free school meals. Nor is this caused only by unemployment, as around forty percent of foodbank users are now from households with at least one adult in paid employment. What happens to foodbanks when prices rocket and donations dry up?

Supermarkets to target producers for cost cuts

Supermarkets are planning mergers (Sainsbury’s and Asda, Tesco and Carrefour) to cut costs through economies of scale. But cutting costs means squeezing farmers and producers who are already living with wafer-thin margins (thirty percent of farm incomes comes from exports), and who themselves will be hit by Brexit with a loss of access to their export markets and their EU subsidies, and higher costs for imported fuel, fertiliser, and machinery. And that’s without the stagnating effect of ports jammed with perishable produce, planes unable to land because the UK is no longer covered by the open skies agreement*, and a labour force that has decided to return to their own countries or seek work elsewhere in the EU as the UK Government wants rid of them. There have already been warnings that with Brexit farmers will face a catastrophic time with many smaller farmers going out of business.

In January 2017, Fergus Ewing, then Cabinet Secretary for Rural Economy and Connectivity, said, “A ‘Hard Brexit’ would be devastating for Scottish agriculture and the many food companies which rely on Scottish produce. Potentially, they face both high tariffs of up to 50% and loss of subsidy support. It may also put at risk Scottish protected food names which give confidence to consumers, and the common regulatory frameworks which help maintain food safety, animal and plant health standards and guarantee access to EU markets and many other countries.”

But it’s not just farmers who’ll be hard hit. According to modelling undertaken by the Fraser of Allander Institute, Brexit will mean that after 10 years real wages are expected to be 7% lower, equivalent to a reduction of around £2,000 per year. That’s a whopping hit to our pockets and those of our families, and inevitably it will impact on the food we are able to buy.

And with the mantra that no deal is better than a bad deal still regularly trotted out by the Brexiters, it is well to remember this:

“The available evidence also indicates that a chaotic exit from the EU, including an unplanned reversion to WTO rules would be more damaging than a planned transition to WTO terms.

“Notwithstanding this, it is also important to note that there is no longer any such thing as completely free trade. All trade is managed trade with benefits for both partners in any deal. A complete absence of any trade rules [as would be the case if the UK crashed out of the EU without a deal] creates significant uncertainty and consequent economic damage.”

SCOTLAND’S PLACE IN EUROPE: People, Jobs and Investment, The Scottish Government, 2018

It’s not only foodstuffs from the EU that will be affected by Brexit, so will those from many other countries with which the EU has trade deals. The UK hopes to roll over these deals, but so far all has been quiet on this front and a number of countries have indicated that they will be looking to renegotiate their deal for better terms as the UK is a much smaller market than the EU.

EU has trade deals with countries around the globe

Not many countries now with which the EU does not have some kind of trade deal.

This Scottish Government analysis indicates that should the UK pursue the WTO-style relationship demanded by many leading Brexiters, Scotland’s GDP would be around 8.5%, or £12.7 billion (in 2016 cash terms), lower by 2030, compared to continued full EU membership. This is equivalent to a loss of around £2,300 per year for each person in Scotland. That’s the equivalent to a great many trips to the supermarket, and for some it’s more than they spend on food annually.

A Free Trade Agreement relationship would mean Scotland’s GDP would be 6.1% (£9bn in 2016 cash terms) lower by 2030. Should the UK remain in the Single Market by participating in the EEA this impact could be significantly mitigated, with Scottish GDP estimated to be around 2.7% (or £4 billion in 2016 cash terms) lower.

Ration books?

Has the Tory Government organised the printing of ration books yet, or are they as lackadaisical about that as they have been about everything else to do with Brexit? For not only will shelves carry more limited stock, causing shortages and queues, but food prices for both luxury foods and staples will rise. The diversity and amount of food products available to shoppers will fall, but our ability to buy a more limited range of foodstuffs will be lessened (unless of course you live in a mild part of the country with a garden of several acres and the wherewithal to erect glasshouses that can be heated during Scotland’s long winter months).

Will food shortages prompt social unrest, riots in the streets, or will folk just mutter about the perfidy of the EU that has brought them to this juncture, and believe there’s no point in another election as Labour are as bad as the Tories? That lacklustre apathy will suit the Tories as they have no intention of relinquishing power, not now they have destroyed democracy and have within their grasp the opportunity to remould the UK into an image more acceptable to their far right beliefs. And, going by their present performance, the press and media will push this conclusion and suffer no questioning of it.

Sadly, it will be many of those who voted for Brexit who will suffer most, those who were already at their wits end and merely wanted to make a protest, not really thinking or caring about the EU, Brexit or the consequences.

Perhaps I have peculiar buying habits when it comes to food, not buying much the same as most Scots, so others might fare better. Let’s see.

HM Revenue and Customs has a graphic giving UK Imports and Exports by Region, year to March 2018.

UK imports and exports by nation/region

Okay, so Scotland exports more than it imports. But it still doesn’t tell us about food imports.

HMRC also has a chart giving Exports and Imports for the year end Q1 2018 with a comparison to the previous year, though doesn’t break these down into various commodities, so the amount of food imported is unknown. Overall UK imports amount to £468.4bn, a 5.5% increase over the previous year. For Scotland the figure is £24.6bn, a 7.3% increase.

In 2016 the origins of food consumed in the UK were: UK 49%, EU 30%, Africa 5%, America 4%, Asia 4%, rest of Europe 2%, Australasia 1%, with the three largest value imported commodity groups (at 2016 prices) being fruit & vegetables, meat, and beverages. Expenditure on food (including non-alcoholic drinks) increased by 3.0% to £96 billon.

UK trade different food groups

UK trade in different food groups, 2016

The UK is not self-sufficient in food production; it imports 48% of the total food consumed and the proportion is rising.

Look at the amount of fruit and vegetables imported by the UK, plus fish, dairy and eggs and cereals. That bears out what my store cupboard tells me.

But what about Scotland?

The total value of Scottish imports is given in the chart below, but, again, this provides no information on food imports.

Scottish imports by countries of origin

Origin of imports of food into Scotland (excluding imports from the rest of the UK), 2010

Origin of food Imports into Scotland

Top food imports from each importing region (imports from the rest of the UK excluded), 2010.

Source: HMRC Regional Trade Statistics

  • The top food import from the EU15 into Scotland is dairy and eggs accounting for 24% of all imports from the region in 2010.
  • Animal feed accounted for 89% of all imports from Latin America and the Caribbean and 77% of imports from North America.
  • Imports from the Middle East and North Africa are mainly fruit and vegetables making up 71% of imports from that region.

Since the start of the recession in 2007 to 2016 all foods have increased in price. The smallest rise was milk, cheese and eggs at 17%, with vegetables rising 18%, meat 26%, bread and cereals 28%, oils and fats 39%, fruit 40%, and sugar, jam, syrups, chocolate and confectionery 41%.  We have been warned that the effects of Brexit will be much worse than that recession.

That’s a huge percentage of fruit and veg coming fromthe Middle East and North Africa, and Asia and Oceania.

So it’s not just exports that Brexit will impact adversely, although this is the area that receives most attention – it’s our imports too, and what food appears on our supermarket shelves and on our tables. It certainly looks as if our shopping trolleys will be piled less high after Brexit, and as for wine…we may be returning to the days when a bottle was only bought for a special occasion and sipped primly as we viewed the small bowl of olives with knotted-brow suspicion. Such stuff had to be frowned upon as it just wasn’t British.

Keep Scotland the brand

Which brings me neatly to Scotland the Brand campaign. Hope you’re supporting it and shunning the Scottish produce plastered with union flags. Our producers have worked extremely hard over many years to build Scotland’s name as one for high quality produce, a premier product, and a brand these days produced in GM free, and fracking-free conditions. Let’s resist Westminster’s attempts to browbeat us into labelling our food British, and support our producers and the communities they underpin, for if they suffer Scotland’s economy suffers and so do our families.

Food and drink accounts for 20% of Scotland’s exports. 51% of Scottish exports go to the EU

Scottish Exports

Note* The EU–US Open Skies Agreement of 2007 is an open skies air transport agreement between the European Union and the United States, allowing any airline of the EU and US to fly between any point in the European Union and any point in the United States. Both the EU and David Davis (now former Secretary of State for Exiting the EU) have confirmed the likelihood of the UK leaving the EU-US Open Skies Agreement. It is thought that the UK has initiated negotiations with the US on a future (inferior) US-UK Air Transport Agreement.

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