Arla issues Brexit warning over free-trade deal

Arla has warned the government of severe consequences to the UK economy if the dairy industry is forgotten in Brexit negotiations.

The UK’s largest dairy co-op, which has 2,500 dairy farmer-owners and accounted for almost a third of the UK dairy manufacturing industry’s turnover in 2015, commissioned an independent economic impact assessment by the Centre for Economics & Business Research.

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The report found for every £1 of gross value added (GVA), Arla generated, it stimulated a further £14.91 in the supply chain and the wider economy.

GVA is the measure of the value of goods and services produced in any given industry.

It added the co-op, which exported to 69 countries globally in 2016 – including 21 from inside the EU had an estimated value to the UK economy of £6bn, which amounted to 0.33% of total UK GDP.

Arla foods and its farmer suppliers support 119,000 jobs in the UK alone, equivalent to 0.38% of total employment in the country.

Despite Brexit offering many new opportunities, managing director of Arla Foods UK, Tomas Pietrangeli said the potential implementation of trade barriers should be seen as a major risk to these economic benefits provided by the sector.

Government protection

“We need assurances that the transitional arrangements we are likely to require before a free-trade agreement between the UK and the EU is agreed are tariff- and barrier-free.

“To do otherwise will be detrimental not only to us but to many other organisations.”

Mr Pietrangelli added, “That’s why we’re calling on government to protect the health of the British dairy industry and its broader benefits to the wider UK economy and, in doing so, ensuring agriculture and food and drink production are front and centre of its negotiation efforts.”