A number of UK horticultural businesses have made investments in overseas production to supplement their domestic supply. The majority of this investment has been made in southern parts of the EU, although there has also been some investment in Africa. The products involved are predominantly salad crops and fruits.
At present, these crops from elsewhere in the EU can be imported into the UK without tariffs. However, this would change if the UK government decides to impose import tariffs. While these may not be high enough to prevent trade of this kind, it could discourage some such investments in the future. This could limit expansion plans for these businesses, which may have a knock-on effect on their UK operations.
Although it is possible that the UK government may decide to put import tariffs in place in the absence of an EU trade deal, this could mean consumers would have to pay more for fruit and vegetables. This may be politically unacceptable and, therefore, the government may prefer to reduce or remove tariffs. While this would make little difference to existing trade with the EU, which is already tariff-free, it would also apply to shipments from non-EU countries.
In this situation, UK produce may face increased competition from supplies from elsewhere. This may not be too disruptive, given that most imports of products that compete with UK produce are sourced from the EU, or from countries with preferential access to the EU market.
Suppliers from outside the EU may also increase sales to the UK, because their produce would be more competitive than previously. The extent to which this happened would also depend on exchange rates, however, as well as factors such as sanitary and phytosanitary controls.
This piece is taken from one of the AHDB’s new series of Horizon reports, which analyses the various impacts of Brexit on the trade.
