US tariffs force UK pork to consider new markets

UK pork exports to the US are currently valued at around £33.4m a year to the industry, according to levy body the Agriculture & Horticulture Development Board (AHDB). That figure has risen significantly over the past five years.

The tariffs, which reach an estimated £6.1bn annually, were imposed on 18 October, affecting a number of food and drink manufacturers across the EU. The issue relates to EU subsidies given to aerospace giant Airbus, which has manufacturing sites in many countries across Europe, including the UK.

2018 figures show that the UK was sending around 11,000 tonnes a year to the US, a number with the potential for further growth, according to experts. But the British Meat Processors Association (BMPA) told Food Manufacture​ that many firms would now be forced to consider other markets to mitigate against the “potentially very damaging​” new laws.

“It could be a real problem for the pig meat sector​,” said Peter Hardwick, trade policy advisor at the BMPA.

Strong demand​

“That is £34m that has to potentially go elsewhere. There is certainly strong demand and that will mitigate against the issue, but there is no getting away from the fact that it is a real problem​.”

Hardwick added that the move could be doubly damaging for trade with the UK’s main competitors in the export market – Denmark and the Netherlands – not being subject to the tariffs due to neither country’s association with Airbus.

The National Pig Association (NPA) has highlighted the value that UK pork brings to the US through the offering of well-bred, antibiotic-free products, meaning potential for trade elsewhere remained strong.

However, the NPA told Food Manufacture​ that the value of trade with the US had perhaps not quite been recognised until now, meaning it was unclear at this stage how far down the supply chain the damage was done.

“It’s not high volume, but it’s high value​,” said Edward Barker, NPA senior policy advisor. “The tariffs are going to have a big impact.​”

Earlier this month, the NPA wrote a letter seeking support from Trade Secretary Lynne Truss. The letter stressed: “The nature of the trade has largely been the export of premium, high-value, high-welfare pigs, raised without antibiotics. As I am sure you are aware, this is not a standard of production common to the US and, as a result, it is a popular product there. More importantly, this is a growing trade.​”

Retaliation​

Meanwhile, analysts have also highlighted the damage that the tariffs could do to the wider food sector, particularly dairy.

“It is terrible news​,” Julian Wild, corporate finance director at Rollits, told Food Manufacture​. “It is hard to know how long-term these tariffs will be, as they are in retaliation, but they will be very painful in the short-term.​

“This only goes to show that all the Leave voters who can’t wait to be released from the EU and rush into the arms of the US are going to get a very rude awakening. The US only acts in its own best interests and isn’t going to do the UK any favours.​”