Befriending Brexit anxiety in the Food and Drink sector

The Food and Drink sector is the UK and Scotland’s largest manufacturing sector and pre-Brexit, was on the verge of massive growth. The Food and Drink sector in Scotland accounts for 30% of total manufacturing turnover and employs 44,000 people. Now, ahead lies the uncertainty over the UK’s future trade rules, food standards, availability of workers, on top of the threat of climate change, the rapidly changing consumer demands for sustainable, traceable, nutritious, ethically sourced, incredibly labelled, on-trend products. However. Also ahead lies untapped export markets and a government commitment to support the sector to double turnover to £30 billion in the next decade.

Last week a £10m funding package - the largest public sector investment in the Food and Drink industry in Scotland - was announced. Due to open in 2022, The SeedPod, is an innovation hub In Aberdeenshire to drive growth that will provide tools, knowledge and training to companies to identify new markets, develop new products and adopt cutting edge technologies.

The sector growth strategy is not export led. By moving up the value chain, food and drink companies will add value to their products for the internal market too.  Nevertheless, this investment is a strong signal that it’s time for business to shift their vision beyond Incoterms to operationalising Brexit.  

The sector has identified 5 priority markets for export growth - China, India, Japan, the Gulf and the USA. It’s not that Scotland is turning its back on Europe, or looking for new markets to substitute access to the EU market, Scotland is building its future alongside the traditional European markets.

Now is the time for companies to complete the Brexit checklists and befriend Brexit anxiety. We don’t know the rules of origin and taxes that will apply to products entering new markets when the UK operates an independent trade policy, but we do know what they are now. This uncertainty will not disappear on 31st January. Brexit provides the opportunity to lobby for better terms of trade with potential partners as agreements are rolled over or negotiated with non-EU countries, or even to push for sectoral commitments such as the recent UK-China beef protocol when trade deals are far off.  

Formulating industry positions is a complex process. The UK’s Brexit negotiations catastrophe (both at home and with the EU) is mostly due to the fact that Westminster tried to decide what a future relationship with the EU would look like after triggering Article 50. Schoolboy error. If businesses want to determine UK Government defensive and offensive positions in future trade negotiations, the time to start formulating them is now.