The Courier & Advertiser (Fife Edition)
Food and Drink
Focusing on the here and now amid Brexit uncertainty –
Uncertainty is disliked by all businesses.
And there is no doubt the recent vote for Britain to leave the European Union has had a particularly unsettling effect on Scottish food and drink exporters.
The Brexit vote has left many firms unsure what the future holds for them in their international markets.
Scottish exports to the EU are worth more than £10 billion annually, but no one yet knows when the UK will leave the EU or what our future relationship with the rest of Europe will be.
Even the experts are pretty much in the dark, and it could be months or years until there is any real clarity.
Adding to the uncertainty for Scottish businesses, the First Minister Nicola Sturgeon has said the UK’s negotiating position must allow those parts of Britain that voted to leave the EU the option of doing so, while those parts which voted to stay should have the option to remain.
If Scotland’s interests cannot be protected, the option to consider a second independence referendum remains.
While much is unclear, there have been some immediate and obvious impacts of the vote for Brexit.
The pound crashed against the euro and the dollar: good news for exporters, and a boost to Britain’s tourism industry.
On the downside, the currency’s fall means UK firms importing raw materials will be among the losers, as will British consumers buying imported goods and those holidaying abroad.
Leadership organisation Scotland Food and Drink said the impact of the referendum result will be felt strongly by the food and drink industry.
Chief executive James Withers and chairman David Kilshaw said the precise impact is unknown, but they were still positive on industry prospects.
“It is a time for calm heads and industry leadership,” they said.
“Whilst there are inevitable uncertainties, we must reflect on what we do know.
“We know we have an ever-strengthening foundation to continue the remarkable progress of the food and drink industry over recent years.
“Scotland’s £14 billion, growing food and drink sector is central to the Scottish economy.
“It has been our fastest-growing export, and one of the best-performing domestic sectors.
“There is also an expanding world of consumers that want high-quality products with a strong provenance story. “None of that has changed.” Whisky is one of the country’s most significant industries and exporters, with more than 90% of Scotch whisky produced sold outside the UK.
Of the £3.8 billion worth of Scotch exported last year, £1.2bn was shipped to the EU.
David Frost, chief executive of the Scotch Whisky Association (SWA), said that leaving the EU will lead to opportunities for the UK.
But he wants the UK Government to bring clarity to the transition to Brexit as soon as possible, and to negotiate to ensure that the current open trading environment is not affected.
Mr Frost added: “Finding practical ways forward on export practicalities and on free-trade agreements should be high on the agenda as negotiations begin in the coming months.”
The SWA says we can be confident certain things will not change. For example, Scotch whisky will not face a tariff on exports to the EU.
However, other things will definitely change, such as new administrative requirements for exports to the EU.
Despite uncertainty in some quarters, many companies are still upbeat about the UK’s prospects post-Brexit.