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The impact of Brexit on food and beverage products What would happen without a deal?

The United Kingdom is still part of the European Union, so EU law still applies, but its departure is scheduled on the 29th of March 2019, when the UK will officially become a ‘third country’.

According to the Withdrawal Act, EU law will be transposed directly into UK law and thus it will be the same as it is currently. Then, the UK government will be able to decide whether it wishes to make changes to the internal legislation.

Nevertheless, transposing all those norms is not easy and, depending on the outcome of the negotiations, the UK may need to set up new bodies and systems in order to enable its own law to operate after Brexit.

The withdrawal agreement, among other things, sets out what will happen to existing products and regulatory requirements after Brexit. It also provides for a transitional period until 30th December 2020, to give businesses time to adapt to new arrangements.

Thanks to the free movement of goods, the EU operates as a single market with common regulatory standards and a customs union with no tariffs on imports between Member States and a common tariff for imports from ‘third countries’. After Brexit and in absence of a deal, the UK will not be able to beneficiate of this situation anymore. The political declaration negotiated between the EU (with 27 Members) and the UK contains also a new customs arrangement and co-operation on goods. However, there is still much uncertainty as to the details of the future relationship at this stage.

Since the UK Parliament has rejected the withdrawal terms, a ‘no deal’ Brexit scenario is probable and it will have a massive impact on food and beverage products. In fact, the UK is not self-sufficient in food. It imports regularly from different countries food and drink products as well as raw materials and ingredients; furthermore, production stages of manufacture, packaging and labelling are often performed in different locations.

The legal framework on risk assessment and authorisations, labelling, organic products, and products protected by geographical indications (PGIs) depends on the final agreement, taking into account that much of UK legislation is now based on European Authorities, such as EFSA, and on European systems and legal sources, like RASSF and Food Hygiene Package. Not to mention the additional costs and risks for contracts with suppliers and customers who are not from the UK and the fact that in the UK agricultural industry many workers are European citizens.

According to the Guardian, already in September many experts in the British food industry, as well as a great deal of farmers, producers and retailers, started to see Brexit as “a potential calamity with which the British government has failed to engage”. Indeed, Brexit is likely to be a disruption to the British food supply chain and some companies are already moving their production from the UK to other Countries in the EU.

The situation is highly complex and constantly evolving. In the short term, a ‘no deal’ scenario would have an immediate and strong impact on the British food industry. Even a well-negotiated free trade deal, which is very uncertain so far, would arguably have a number of consequences. One can only keep an eye on negotiations and their outcome, hoping that the final agreement, if possible, will take into account the last 40 years of cooperation that characterized this hugely consequential sector.

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