Wednesday 12 December 2018

Price of pint here likely to rise if UK crashes out of EU, warn industry experts

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Kevin Doyle

Kevin Doyle

The price of a pint could rise in the event that the UK leaves the European Union in a chaotic fashion.

Industry experts have warned that preparations for a no-deal scenario, including the possibility of tariffs on imports/exports, are not sufficient.

An Oireachtas committee heard yesterday that alcohol worth €1.6bn leaves the island of Ireland every year. Any imposition of tariffs or disruption to the purchase of ingredients in either the Republic or Northern Ireland could ultimately hit consumers.

The Alcohol Beverage Federation of Ireland (ABFI) said a no-deal scenario could bring "immediate" tariffs on beer and cider. While pricing will be a matter for each individual company, the reality is that some will not be able to absorb the impact.

Patricia Callan, director of ABFI, said businesses are "very exposed" in the context of all-island supply chains.

"Most of our glass which we put products into, whether it's beer, cider, wine, spirits, 130 million glass bottles are imported from the UK every year. Obviously if tariffs were introduced that would bring an extra cost," she said.

Ms Callan said companies are "very concerned" about the potential for customs checks or delays.

The ABFI urged all parties to ensure that the Withdrawal Agreement currently on the table is approved.

This could have a particular impact on certain products such as Irish whiskey and poitín, which cannot be produced outside of this island under EU rules.

The deal currently allows for this special status to continue to apply to the North.

Food Drink Ireland also made a presentation to TDs and senators yesterday, in which its director Paul Kelly warned about the impact of a no-deal scenario on the wider export market.

"Higher trade prices will therefore cause export volumes from the EU to the UK to drop significantly.

"The disruptive impact of this, combined with further currency turbulence and likely gridlock at ports must be avoided for the sake of Irish agri-food," he said.

Although the reliance on the UK has reduced in recent years, it remains our largest export market.

The export exposure of the various sectors within agri-food to the UK includes beef at 51pc, dairy at 24pc and prepared consumer foods at 62pc of exports. Half of all cheese produced here goes to the UK.

"This demonstrates the importance of maintaining our market position in this high-value, high-quality market that has a substantial food deficit," Mr Kelly said.

He noted that the Irish exposure to Brexit is far greater in real terms than that of countries like France, Belgium, Netherlands, Germany or Italy.

"Typically, less than 10pc of their agri-food exports are to the UK. This highlights the unique circumstances faced by Irish agri-food and the need for exceptional mitigation measures," he said.

Irish Independent

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