Fears in the UK that dairy produce tariffs after Brexit 'could prompt rapid rise in prices'
The imposition of trading tariffs on dairy produce after Brexit could push up prices for consumers or have dire consequences for farmers, industry leaders have said.
Dairy industry bosses told MPs on the Environment, Food and Rural Affairs Committee that tariffs with Europe or falling back on World Trade Organisation (WTO) rules in the absence of a deal with the EU could block exports or see consumer prices rising.
Paul Vernon, chairman of industry body Dairy UK, said: "Exports are critical for our business and for the industry.
"Tariffs could block exports and equally they could block tariffs, or if tariffs were to be accepted on imports, we could see inflation at a consumer level increasing quite rapidly.
"Tariffs are not something we would want either way."
And he warned: "WTO tariffs on dairy do what they are designed to do, they will stop trade."
The ability for the dairy industry to absorb tariffs under WTO rules, which are in the region of 40% to 50% on products such as cheese, would be "minimal if not non-existent".
"They would either block trade or be reflected in consumer prices, and that reflection would have knock-on consequence of reducing demand for dairy, so it's a vicious circle, not a virtuous circle."
Nick Whelan, group chief executive of Northern Ireland dairy company Dale Farm, said it led to a difficult choice of tariffs that would lead to increased food prices or opening up "our precious industry" to other nations with different standards and costs.
He said research had showed there would need to be support for dairy farmers if they wanted to stay in business.
"Simply having free trade and no support would probably eradicate the dairy industry in Northern Ireland," he said.
Quizzed on what practical solutions there were for dealing with a border between Northern Ireland and the Republic of Ireland as a result of leaving the customs union, Mr Whelan said: "The first practical idea would be to stay in the customs union."
Michael Oakes, chairman of the National Farmers' Union dairy board, said the "worst case scenario" would be to end up on WTO rules, and - in order to keep food inflation down for consumers - having no tariffs on imports which led to a not level playing field for UK farmers.
He added that it was important to protect welfare standards which UK farmers had in place and which customers expected.
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