Scottish foods that are sold in Europe could be hit by a 50 per cent-plus price hike following Brexit, it has been claimed.
James Withers, the chief executive of the industry body Scotland Food and Drink, spoke about the impact leaving the EU could have on the sector, particularly if the UK fails to agree a trade deal.
The food and drink sector, which is worth £15 billion a year to the Scottish economy, has been “haunted” by the “spectre of no-deal Brexit” since the referendum in 2016, Mr Withers said.
He warned if the UK fails to reach an agreement with the remaining 27 EU nations on trade in the coming months then this could linger on.
For the UK’s transition period to be extended beyond the end of 2020, work would need to get under way in the summer, with Mr Withers saying that left the UK with a “little over 20 weeks to frame a trade deal with the EU”.
“In other words, we’re in search of a miracle,” he said.
Mr Withers issued the warning as the presidents of the European Council and the European Commission yesterday formally signed the Brexit Withdrawal Agreement ahead of Britain’s departure from the EU on Friday.
Charles Michel and Ursula von der Leyen put their signatures to the document in Brussels after the Queen gave royal assent to the legislation implementing the agreement on Thursday. Following the formalities in the Belgian capital, the agreement was being taken to London by diplomatic bag for Boris Johnson to sign.
The European Parliament is now expected to vote to approve the agreement on Wednesday. Mr Withers, speaking ahead of a Brexit breakfast event in Edinburgh hosted by law firm CMS on Tuesday, said: “The spectre of a no-deal Brexit has haunted Scotland’s farming, food and drink industry since 2016.
“It feels like the very thing we feared and have been told has been avoided may now be facing us at the end of the 2020.”
He said even if a deal could be agreed, the UK Government’s “strategic shift” away from alignment with EU regulations has served to “kill off any hope of achieving frictionless trade or anything close to it”.
Mr Withers warned: “Tariffs anywhere close to WTO levels could increase the price of our products in the EU market by more than 50 per cent.”
He added: “Costly new checks and processes – and potentially tariffs on some of our food products – will act as a major new barrier to trade with our biggest single export market. Scotland sold £2 billion of food and drink to the EU last year, and with ingredient imports flowing the other way, the implications of barriers to trade cannot be overestimated.”
Mr Withers stressed the importance of frictionless trade, particularly for perishable foodstuffs. Around 7.5 per cent of all sales of red meat from Scotland go to Europe, while exports to the EU make up a quarter of all lamb sales, the industry body said.
Mr Withers said: “While seafood doesn’t face the same scale of tariff threat, additional bureaucratic costs and the associated risk of delays is a real concern.”
New trade agreements with countries outside of Europe could be the “silver lining to what looks like a very dark cloud” for the industry, Scotland Food and Drink said..