Scotland’s wholesalers join industry groups in warning Prime Minister of no-deal Brexit concerns

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The Scottish Wholesale Association (SWA) is among 11 of Scotland’s leading food, drink, seafood and farming organisations that have taken the “unusual step” of making a direct plea to the Prime Minister to warn of the “perilous situation” facing the food and drink industry if there is no-deal Brexit.

SWA chief executive Colin Smith said the trade association had ensured the letter stated that distributors were included within the businesses asked to be given a financial compensation package, where they encounter loses as a direct result of border or market disruption.

In a letter to Boris Johnson, the groups stress the damage that coronavirus has caused this year and warn that the “fallout from a no deal would be catastrophic”. The UK’s Brexit transition period is set to end on December 31.

In recognising the enormity of the task facing the UK Government in negotiating new trade deals, the letter states: “The end of the transition period and ever-increasing uncertainty on the terms of our new trading arrangement with the EU compounds these concerns. The EU is the destination of 70% of our food exports. It is also the largest market for Scotch whisky. Indeed, our food and drink exports are four times more important to the Scottish economy than to the English economy.

“Tariffs, border disruption for high value perishable goods, and certification costs are all far greater threats for the food and drink sector than they are for other sectors in the economy. And our food producers are extremely reliant on labour from the EU, such as the North East where over 70% of the workforce in seafood processing are EU nationals.

“So, what we do in the next 60 days is critical to the survival of many food, drink, farming, fishing and seafood businesses, and the supply chain and jobs they support.”

The letter also states: “There are immediate steps that need to be taken by the UK Government to avoid enormous damage to our industry – one that has faced a multi-billion-pound impact from the Covid-19 pandemic.

“As you will be aware, food and drink is one of Scotland’s fastest growing and globally recognised sectors, with a value of £15 billion per annum and employing 120,000 people in communities the length and breadth of Scotland. The sector is critical to Scotland’s economy as one of the biggest employers, particularly in coastal and rural communities where businesses, large and small, are the lifeblood.

“Covid-19 has had a devastating impact on many businesses across the industry and through the supply chain. The effective shutdown of export markets across the world has been compounded by the closure of huge swathes of the UK hospitality sector in 2020. The impact has been grave with the latest assessment being a £3 billion loss of revenue to industry this year alone, compounded by the additional operational costs incurred by those businesses.

“Just as businesses thought they had weathered the worst of the storm and could chart a path to recovery, the second wave of the virus has now taken hold, with further deep restrictions across the UK and much of Europe. The timing of the second wave means the impact is likely to be even more severe given this is typically the most important trading period for many businesses, particularly our seafood, red meat and drink producers.”

SWA chief executive Colin Smith said: “SWA ensured that distributors were included within the businesses asked to be given a financial compensation package, where they encounter loses as a direct result of border or market disruption.”

The signatories to the letter are: Scotland Food & Drink; Food and Drink Federation Scotland; National Farmers’ Union Scotland; Quality Meat Scotland; Scottish Agricultural Organisation Society; Scottish Association of Meat Wholesalers, Scottish Bakers; Scottish Salmon Producers’ Organisation; Scottish Seafood Association; Seafood Scotland; and the Scottish Wholesale Association.