In a speech delivered January 17, UK Prime Minister, Theresa May announced that the UK will quit the EU Single Market of 500 million consumers upon its exiting the EU. This announcement reflects the UK’s dedicated course to pursue a 12-point plan designed to drive a “hard Brexit,” and a divestment from the world’s largest trading bloc that accounts for 75 percent of the UK’s food and beverage exports.

The 12 points outlined in the plan include:

• Providing certainly about the UK’s exit from the EU
• Controlling the number of people arriving in the UK from Europe
• Ensuring rights for EU nationals in Britain and British nationals in this country
• Protecting workers’ rights
• Fostering free trade with European markets via a free trade agreement
• Forging new trade agreements with other countries
• Making Britain the best place for innovation and science
• Cooperating with others in the fight against crime and terrorism
• Ensuring quitting the EU is a smooth process
• Controlling its own laws
• Strengthening ties between the four UK home nations
• Keeping the Common Trade Area with Ireland

There is a recognition within Britain’s food and agriculture industries that the Brexit, while challenging, could provide opportunities for growth, however, there has been widespread pushback when it comes to the possibility of exiting the EU Single Market.

“Brexit creates an enormous opportunity for farming, food production and for Britain,” said Meurig Raymond, president of the National Farmers’ Union. “But to deliver this new future, we must secure the best possible access to the single market and continued access to a competent and reliable workforce. Getting this right will set the foundations for a successful new British agricultural policy.”

This sentiment was echoed by some of the biggest players in the UK’s food industry, as a coalition of 75 food producers and organizations including Weetabix, Müller, and Marks and Spencer expressed in a letter to Prime Minister May how critical access to the Single Market will be to the industry.

“For our sector, maintaining tariff-free access to the EU single market is vital,” stated the letter. “It is where 75 percent of our food exports go, so all our farming and food businesses wish to achieve this outcome.”

Additionally, Wales’ Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths has expressed the importance to the food and agriculture sectors of not interrupting the UK’s connection to the EU Single Market, stating, “The UK’s decision to leave the EU has caused uncertainty and I want to use my time at the Royal Welsh to reassure producers that we will be fighting for the UK to negotiate to retain access to the 500 million customers in the Single Market. However, as a country we do business around the world and we must now aim to do more.”

In light of these prevailing sentiments, Food Manufacture reports that Prime Minister May pledged to work for the “greatest possible” access to the EU Single Market, but added, “I want us to be a truly Global Britain – the best friend and neighbor to our European partners, but a country that reaches beyond the borders of Europe too. A country that goes out into the world to build relationships with old friends and new alike.”

Ornua

As what Reuters calls “the most complicated negotiations in post-World War Two European history” unfold, Irish agri-food commercial co-operative, Ornua, announced it has agreed to acquire cheese ingredients company FJ Need as part of the group’s strategic plan to strengthen its position in Germany, North America, and the UK “in the post-Brexit environment.”

The deal, which can serve as an example of how UK agri-food giants are making timely, strategic decisions, includes a cheese cutting, grating, and slicing facility, two cheese brands, and a distribution fleet. The FJ Need production facility currently produces 16,000 tons of ingredients per year, and Ornua foresees further expanding this capacity to meet the growing demand for cheese ingredients both in, and outside the UK market. It is FJ Need’s complimentary customer base, the potential for expansion and scale, and the ability to leverage Ornua’s existing export routes that aligns with Ornua’s vision for its group in a rapidly changing market.

This acquisition is the latest in a chain of investments by Ornua targeted at securing, expanding, and strengthening new market channels for Irish dairy products. Over the past two years, the group has committed capital across Europe, Africa, the U.S., and China, with one of the most recent investments being an allocation of €10 million to expand its Neukirchen-Vluyn facility in Dusseldorf.

This will be the third investment in the site, bringing the group’s total capital investment in Neukirchen-Vluyn to €50 million as the German market, with 20 million households, has grown to be a leading market for Ornua’s Kerrygold brand butter, spreads, cheese and yogurts. Additionally, Ornua recently opened Kerrgold Park in Mitchelstown, County Cork, Ireland to serve as the global hub for the brand that has reaches retail sales of €750 million on its way to the group’s goal of €1 billion.

“Kerrygold in Germany will again deliver double-digit growth,” said Kevin Lane, CEO of Ornua, upon the announcement of the Germany investment. “Ongoing investment in the brand and our facilities has been critical to the Kerrygold success story. This most recent investment enables us to further expand our business in Germany and throughout this region. We are a premium brand and our customers expect products of consistent high quality. Ensuring that we meet those expectations, every time, is key to growing our business.”

 

-Lynda Kiernan

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration please contact Ms. Kiernan at lkiernan@globalaginvesting.com