Just What Will Be the Brexit Impact On Food?

The reality is that the United Kingdom depends on the European Union for approximately one-quarter of its foods, but only 4 percent from North America, according to the U.K. Department for Environment, Food & Rural Affairs.

Britain will be effected the most as it’s the value of its pound continues to fall against the dollar and euro making the imports more expensive. 

The benefits of forming the E.U. for agriculture was that it made it considerably easier for the U.K. and the other 27 European states to buy and sell goods to each other – it was a commitment to the free movement of labor, capital, goods and services. Now, with the Brexit vote most likely forcing the departure of the U.K. from the E.U., it is unlikely that the other U.C. countries will offer the U.K. access to the E.U. single market, forcing them to negotiate with each country separately. No doubt, the issue of allowing EU workers free movement into the UK will be a sticking point since much of the fervor leading to the Brexit vote was centered around this issue and immigration. 

Of concern for farmers is the loss of the E.U.’s agriculture subsidies (much like our own Farm Bill) that totaled almost 3 billion pounds to British farmers. The deputy president of the Farmers Union told the Daily Mail that “prices will have to go up to ensure farms stay in profit. Many are already being paid below the cost of production prices and that is not sustainable.” He sees the biggest price increases in fruits and vegetables. Freshfel, the European Fresh Produce Association, reports that in 2015 the U.K. received imports from an estimated 120 countries of more than 5.6 metric tons of fresh fruit and vegetables valued at over $7.5 billion, over half of those come from the other members of the E.U. 

It is doubtful that the impact of the U.K. leaving the E.U. will have much impact on the prices on the imports to the United States. In fact, in the short term there might be some benefits, as the British Pound continues its fall against the dollar. The U.K. exports to the U.S. 14.5 percent of its total exports,with the number one food export being beverages at $2.1 billion dollars just to the U.S.

And then there is Ireland and Scotland, both of which say they will annex from the U.K. and stay in the E.U. Both have major food and beverage exports, which have shown significant increases over the past few years. For Ireland its dairy products, and for Scotland, it's Scotch.