Primary food processors are warning of the detrimental effect of a no-deal scenario on their industries. Since the beginning of the negotiations, PFP has supported the efforts of the EU and UK negotiators to achieve an ambitious and comprehensive trade agreement that provides for the continuation of duty and quota free trade. This is a crucial prerequisite to ensure the least disruptive impact on trade and the food supply chain across the channel.

EU PFP industries annually export more than 3 million tonnes of products to the UK worth € 1.7 billion and import more than 1 million tonnes of products worth € 637 million. These trade flows are at great risk today, as less than a month before the end of the transition period on December 31, 2020, efforts by negotiators to reach an agreement are still continuing. This situation generates confusion in our industries about the objective being pursued now and the timetable for the implementation of such an ambitious FTA.

Our industries continue to support duty free and quota free trade throughout the Canal, and a level playing field that provides a fair trade environment. Even if such an ambitious trade deal is finalized and implemented in due time, companies will need time to adapt to the new trade conditions between the two blocs.

PFP industries require an adjustment period of at least 6 months, during which tolerance would allow companies to adapt to new requirements resulting from the implementation of a new trade agreement or as a consequence of the UK's exit from the single market of the EU. This period would allow for progressive adjustment to new regulatory or customs policies, and adaptation to UK legal requirements and procedures (eg labeling, certifications, rules of origin).

In the event that no trade agreement is reached between the EU and the United Kingdom, the breach of supply chains will jeopardize the value of 2.33 billion euros of PFP products traded annually throughout the Canal. The immediate cost of the tariffs will affect companies' ability to maintain business with UK-based suppliers and customers, despite long-established relationships and interconnected industries.

The PFP industries highlight that in the current challenging economic context, clarification of the eligibility criteria for the Brexit Adjustment Reserve is much needed. The UK is a key export market and accounts for up to 9% of production output from some sectors.

- STARCH:

• 715,000 tonnes of starch products (around € 507 million), representing 53% of the total UK starch consumer market and 9% of the EU starch production;

- SUGAR:

• 500,000 tonnes of white sugar (on average over the last 5 years), which represents 25% of total UK domestic consumption;

- FLOUR:

• 75,000 tonnes of wheat flour per year, mainly from France, Germany and Poland, worth € 30 million.
• about 100 000 tonnes of mixtures and masses of flour, valued at 140 million euros;

- VEGETABLE OILS:

• 691 000 tonnes of vegetable oils worth around € 500 million
• 898,000 tonnes of oilseed flours worth around € 240 million

- CACAO:

• 11,890 tonnes of cocoa beans worth around € 28 million
• 1,858 tonnes of cocoa shells for an approximate value of € half a million
• 12,999 tonnes of cocoa paste worth around € 43 million
• 38,191 tonnes of cocoa butter worth around € 204 million
• 20,387 tonnes of cocoa powder worth around € 45 million

- STARCH:

• 52,000 tonnes of starch products imported from the UK, half of them from Ireland, for an amount of 78 million euros.

- FLOUR:

• The EU-27 (mainly the Republic of Ireland) imports around 220,000 tonnes a year from the UK, worth 95 million euros. In addition, approximately 65 000 tonnes of mixtures and masses of flour (CN code 19012000) valued at 85 million euros;

- SUGAR:

• 200,000 tons of white sugar (on average during the last 5 years);

- VEGETABLE OIL:

• 109,000 tonnes of oilseeds worth around € 40 million
• 221,000 tons of vegetable oils worth around € 160 million
• 235,000 tonnes of oilseed meals worth around € 60 million
  

- CACAO:

• 25,764 tons of cacao in grain worth about € 56 million
• 59 tons of cocoa shell worth about € 17,000
• 7,271 tonnes of cocoa paste worth around € 15 million
• 8,391 tonnes of cocoa butter worth around € 41 million
• 2,911 tonnes of cocoa powder worth around € 7 million