The UK’s decision to leave the EU will have profound effects on the policy programme that was laid out in the Queen’s Speech. From a regulatory perspective, the food industry might have some cause for optimism. The long-anticipated Child Obesity Strategy in addition to the Sugar Tax was widely expected to place strict restrictions around the sale and marketing of HFSS goods.
These policies were central to the Prime Minister’s agenda but were not supported by many on the right of the Conservative Party. With the latter’s victory over Europe likely to determine the tone of the Party’s policies going forward, it is now possible that these plans will be kicked yet again into the long-grass.
Even if the Prime Minister does make flagship announcements between now and the October deadline he has set on his premiership, how and if they are taken forward would need to be ratified by the new Cabinet.
Of course the impact on the industry will be wider than just the consequences for planned legislations. The UKis heavily dependent on other EU member states for food – it has a food trade gap of £21bn. Depending on what will be agreed regarding its future relationship with the EU, the UK agri-food sector could be facing significant challenges, from the loss of agricultural subsidies under the Common Agricultural Policy to major trade obstacles in the form of higher tariffs and/ or other market access restrictions.
As in other sectors, post-Brexit will bring volatility, disruption and uncertainty. Food import costs might rise since the sterling plunged and inflation is expected. The UK would have to renegotiate any trade agreement signed under the umbrella of the EU, in which food and agriculture are involved. From a regulatory perspective, it is unclear at this stage how the UK Government will decide to handle those regulations, which are now part of the UK legal system, but it is very likely they will remain in place in the foreseeable future. Depending on the country’s future relationship with the EU, the UK authorities may then decide to gradually review some of the current standards.
Edelman has prepared a full briefing on the implications of Brexit for the Food sector, to read it please click here or see below.