Red meat exports: potential administrative costs of trade under WTO rules

6. Summary

At the time of writing there is still no certainty as to when and how Brexit will take place with the 31^st October now the focal point for leaving the EU without a deal. Should this happen the UK will revert to dealing with the EU under WTO rules. This will mean that tariffs and new trading conditions will be applied which in the case of the red meat sector means a higher cost of goods to the customer as well as new certification requirements, both which could hamper and restrict the sales of Scotch beef and Scotch lamb in the EU.

Until there is clear direction on the implications of Brexit the Scottish red meat supply chain is operating business as usual with some business contingency planning being undertaken behind closed doors. The uncertainty is also influencing the wider supply chain with a reluctance to invest in both capital and on farm which will have an impact on the longer-term development of the sector.

The initial days and months following Brexit will present new challenges for the supply chain as it learns to navigate the new processes needed to do business with EU countries. There will be new regulations to be understood and new paperwork to complete which will take longer and cost more. New barriers to trade will be encountered in the journey to market with the introduction of the Border Inspection Posts, unquantified waiting times as well as the risk of existing customers sourcing beef and lamb from other EU customers where it will be easier and quicker than doing business with their current UK based suppliers.

New market development will be critical to help the Scottish red meat supply chain remain efficient and competitive. There are opportunities to grow the share of Scotch beef in the home market both in retail and foodservice and to increase the marketing of lamb to encourage more Scottish and UK consumers to buy. The opening of more international markets will also help, but this needs to be expedited to help in the short term as well as ensuring market development support is available to exporters to help them identify and develop new market opportunities.

It is also critical that the sector works together proactively to ensure that both existing and new customers in the EU and beyond know that the Scottish red meat industry remains open for business. Leadership in the sector will be key to this approach and this will mean important roles for QMS, SDI and Scotland Food & Drink in helping to realise new market opportunities.

Scotch beef and Scotch lamb are world-renowned products that must remain on the plates of consumers across the world to help the industry sustainably grow and through this growth support the many farms, families and jobs involved in the red meat supply chain in Scotland.