The Impact Of Brexit On The Food Industry

Timing as they say, is everything. As the doors to the 2016 Summer Fancy Food Show opened last Friday at New York City’s Jacob Javits Center to a record-breaking 46,000 attendees, UK’s Prime Minister David Cameron announced the results of the UK’s Brexit vote and his resignation.

Originally published on Forbes.com

Timing as they say, is everything. As the doors to the 2016 Summer Fancy Food Show opened last Friday at New York City’s Jacob Javits Center to a record-breaking 46,000 attendees, UK’s Prime Minister David Cameron announced the results of the UK’s Brexit vote and his resignation. Newscasts are still focused on the drop in the global stock markets and the devaluation of the EU and Britain’s Sterling Pound to its lowest point in 31 years, and the impact on food will also be substantial.

The Fancy Food Show showcased over 180,000 products, according to the show’s organizer the Specialty Food Association, many of which are imports. This show, one of the largest in the U.S., focuses on “gourmet” foods those unique flavors, ingredients and packaging that just seem made for those food-obsessed Millennials.

Global exports of foods and beverages from the UK since 2015 have seen substantial increases. According to the International Trade Center,  categories that showed the most increases include Cocoa, up 24.9% to $955 million), Food Preparations up 22.3% to $2.6 billion, Vegetable and Fruit Preparations up 17.2% to $653 million, Cereal and Milk Preparations up 8.1% to $2.3 billion and Coffee, Tea & Spices up 6.3% to $556 million. The UK exports to the US total 14.5% of its total exports with the number one food export being in beverages at $2.1 billion.

On the other side of the pond, the UK depends on the EU for approximately one-quarter of its food, but only 4% from North America according to the UK Department for Environment, Food & Rural Affairs. Britain will be effected the most as the value of its pound continues to fall against the dollar and euro, making imports more expensive.

The benefits of forming the EU for agriculture was that it made it considerably easier for the UK and the other 27 European states to buy and sell goods to each other – it was a commitment to the free movement of labor, capital, goods and services. Now, with the Brexit vote most likely forcing the departure of the UK from the EU, it is unlikely that the other EU countries will offer the UK access to the EU single market forcing them to negotiate with each country separately. No doubt the issue of allowing EU workers free movement into the UK will be a sticking point since much of the fervor leading to the Brexit vote was centered around this issue and immigration.