'No-deal Brexit threatens Irish access to lucrative British cheddar market'
A no-deal Brexit will result in serious disruption of the British cheddar market which is worth around €310m to Irish dairy processors each year.
Recent analysis by the British advisory body, the Agriculture and Horticulture Development Board (AHDB), also cast doubt on Scottish and English dairies having the capacity to process the 800m litres of Northern Irish milk that is currently handled by Southern dairies.
Cheddar accounted for around 100,000 tonnes of the 120,000 tonnes of Irish cheese exported to the UK in 2018. The British cheddar market is lucrative outlet for the Irish dairy sector and any disruption to the trade would be a major concern.
Under a no-deal Brexit it is anticipated that the UK will place a tariff of around €220/t on imports of cheddar, but the EU is expected to put a tariff of close to €1,670/t on British cheddar exports into Europe.
This will cause serious difficulties for UK companies that export close to 100,000 tonnes of cheddar each year, given that 80pc of the product goes to the EU.
It has been suggested that this British product could be sold on the UK market and displace imports, including Irish cheddar.
However, the AHDB report predicts that the disruption around a no-deal Brexit will result in a “build-up of cheddar stocks in the UK”, with consequent “cash-flow implications for cheddar manufacturers”.
Irish processors have already acted to circumvent possible Brexit difficulties by moving significant quantities of cheese and powders into British cold stores.
The AHDB report also forecasts major difficulties in finding a home for the 800m litres of milk from Northern Ireland that is currently processed in the Republic.
UFU leader Ivor Ferguson suggested recently that this milk could be processed by dairies in Britain, but the AHDB questions the viability of this strategy long-term.
“This milk will either need to be processed in Northern Ireland, most likely into lower-value products such as butter and milk powder, or shipped across to mainland Britain for processing. The latter would put pressure on logistics and the already strained processing capacity in Britain,” the report states.
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