Hard Brexit could cause dairy shortage

The report states, among other things, that the United Kingdom (UK) will face a major shortage of dairy products as a good one Brexit deal is not guaranteed.

'Shortage of products'
Britain is a net importer of dairy products and for everyday products (such as cheddar and boter) depending on Ireland, France, Denmark, Netherlands and Germany. However, the report warns that import tariffs of 41% to 74% are at risk when trade between the European Union (EU) and the UK returns to World Trade Organization rules.

Ash Amirahmadi, the British managing director of Arla, fears that there will be significant consequences for both the supply and the price of dairy products. "We will probably face a shortage of dairy products and we will see price increases. This means that daily necessities (butter, yogurt, baby food and cheese) will become luxury products. In addition, special cheeses, for which only limited production options are possible, will even be very scarce. become."

Although Amirahmadi also indicates that Brexit offers expansion opportunities for its own dairy processors, these British processors will not be able to eliminate the resulting shortage in 3 to 4 years. 

Ireland remains important
Ireland is currently one of the main suppliers of dairy products to Great Britain. The country accounts for 33% of Irish dairy exports, worth around €820 million. Also, more than half of Irish cheese exports go to Great Britain and almost 30% of butter exports are imported by Great Britain. Skimmed milk powder is also often supplied from Ireland (12%).

“Imposing these bizarre import tariffs would be a serious threat to the entire sector,” Amirahmadi said. Glanbia Ireland recently announced that it will develop a mozzarella factory and Dairygold announced that it will produce Jarlsberg cheese. These developments are seen as an attempt to isolate their business from a 'bad Brexit'.