The impact of Brexit on the processed food and drink sector Contents

5Transitional arrangements

50.The majority of stakeholders we heard from were in favour of a transition period as a means to avoid any regulatory and tariff cliff-edge. We therefore welcome the publication of the Draft Withdrawal Agreement on 19 March 2018 which established the terms of the 21-month long transition period following March 2019.107 The Agreement does not include any explicit provision for the transition period to be extended beyond 31 Dec 2020.

51.However, the length of this period will disappoint many of the stakeholders we heard from, as most of them wanted the transition to last for as long as possible (over two years) and for it to be as simple as possible so that businesses do not face adapting to several sets of regulations.108 In the words of Unilever:

To minimise the disruption and impact this could have across all stakeholders, we request that the transition should be made a simple as possible (one step rather than two) if a transitional phase is put in place.109

52.Most witnesses, including the Government, were in favour of maintaining the status quo during the transition period110 and will therefore welcome the Draft Withdrawal Agreement which maintains the status quo for the movement of goods and people. Witnesses had been adamant in asking for the terms of the transition to be announced as quickly as possible to provide businesses with the certainty they need:111

Crucially, this process of transition cannot begin until there is certainty about the end goal of the whole transition process. The transition period should have a clearly defined start and end point and the duration provided should not be decided arbitrarily.112

53.Some witnesses had stressed that the Government was running out of time to let businesses know what the terms of the transition would be and how long it would last without having a detrimental impact on investment and innovation.113 Now that these terms have been announced, some concerns remain about the brevity of the proposed transition period. Sector bodies like the Food and Drink Federation are already asking for the end date of the transition to be flexible and adjusted depending on how fast the sector adapts to the systems to be put in place after the transition.114

54.The transition period that was recently negotiated with the EU is significantly shorter than what the sector had hoped for. This may prove challenging for businesses that may struggle to find the time and have the necessary expertise to familiarise themselves and adjust to the system in place after we leave the EU.

108 Scotch Whiskey Association BRF0018; Council for Responsible Nutrition UK BRF0016, para 31–33; Ferrero UK BRF0015, para 31–33; GMB BRF0014, para 4; Wine and Spirit Trade Association BRF0011, para 2.1; Food and Drink Federation BRF0010, para 3; PAGB BRF0006, para 7.1; Unite the Union BRF0005; British Specialist Nutrition Association BRF0004; ALMR BRF0003; Confederation of Paper Industries BRF0002; Textile Services Association BRF0001

109 Unilever BRF0019, para 3

110 Scotch Whisky Association BRF0018; Wine and Spirit Trade Association BRF0011, para 7.1; British Beer & Pub Association BRF0009, para 26; Defra BRF0008

111 Unilever BRF0019, para 10; Scotch Whisky Association BRF0018; Wine and Spirit Trade Association BRF0011, para 6.2

112 Food and Drink Federation BRF0010, para 44–45

113 Qq8&32 [Ian Wright & Kate Nicholls]; Q4 [Andrew Kuyk]

Published: 22 April 2018