Trade tariffs on raw milk and dairy products will pose a major risk to the dairy industry in Northern Ireland in the event of a no-deal Brexit, the Dairy Council Northern Ireland (DCNI) has said.
DCNI chief executive, Dr Mike Johnston, warned, "This tariff represents 25% of the value of our entire industry. In a sector where the margin is, at best, 3% or 4%, trade tariffs of that magnitude would wipe out the industry."
The tariffs, estimated to amount to £320 million (€364.3 million), will directly affect the price paid to farmers for their milk.
"Our analysis suggests that the milk price paid to farmers would fall by over 10 pence per litre from its current base should such tariffs be imposed," Johnston explained.
The DCNI also pointed out that around 35% of the milk produced in Northern Ireland is processed in the Republic of Ireland.
'Seriously Exposed'
Johnston commented, "The dairy industry in Northern Ireland simply does not have the capacity to process all the milk produced on farms at present and we are seriously exposed."
He added that even after maximising the milk processing capacity, the processing shortfall will amount to around 600 million litres, resulting in a "devastating situation" for the Northern Ireland dairy industry.
"If we don’t get a Brexit deal and cannot transport raw milk south, without significant delays and/or certification requirements, then our industry is facing a crisis of epic proportions," he said.
"We have communicated these significant risks in the event of a no-deal to authorities in NI, the Republic, and London but have not got any satisfactory outcome so far."
'Extremely Worried'
Johnston also added that farmers are milk processors are "extremely worried" as crashing out without a deal on 31 October will imply that Northern Ireland will neither have the capacity to process raw milk nor have the means to pay EU tariffs.
He explained, "Put simply, dairy processors and their farmers will not survive unless there is a deal. NI farmers, processors and customers need a deal to mitigate trade tariffs and enable the continued movement and trade in raw milk and finished products."
The DCNI represents milk processors in Northern Ireland including Dale Farm, Glanbia Cheese, Glanbia Ireland, and Lakeland Dairies.
These four companies account for over 90% of the 2.4 billion litres of milk collected annually from farms in the NI.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Dayeeta Das. Click subscribe to sign up to ESM: The European Supermarket Magazine.
