Dairy Farmers Warn that a No-Deal Brexit Could Increase Milk Prices

The dairy farmers of the United Kingdom have warned that unless Brexit negotiations agree on a trade and labour deal, the price of a pint of milk could increase.

The industry – which employs over 70,000 people – said that Britain leaving the European Union without striking an agreement and having to turn to World Trade Organisation tariffs would be “the worst outcome.”

The chairman of trade body Dairy UK, Paul Vernon, called Brexit a “monumental and game-changing challenge.” He said that the industry has “tremendous potential for exports and product development” if an agreement can be reached.

Without such a deal, Vernon warned regarding “far-reaching consequences” for the sector, which produces an annual turnover of nearly £28bn.

“The stakes could not be higher, and there is a fine balance between creating a climate where we can seize the opportunities that Brexit may present and being left with seriously detrimental trading conditions,” added Vernon.

In a “white paper” about the sector, Dairy UK said that it wanted continued free trade between the European Union and Britain, saying that tariffs would hurt exports and decrease demand.

Other demands involved an “unhurried” transition to whatever agreements are put in place as a result of withdrawing from the European Union to enable the sector to “adapt and take advantage of Brexit.”

An additional concern is that in the absence of continued access to both skilled and unskilled labour, costs could increase rapidly, hitting margins and possibly pushing up prices.

The white paper also exposed that despite the uncertainty that is caused by the impending Brexit, investment by firms in the sector stands at a rate of more than £100m per year.

It also examined the understanding of the public regarding support for the dairy sector. Major findings included that spending is increasing on the full range of dairy products: cream, milk, yogurt, cheese, butter, and organic produce.

According to the research, despite a widening range of alternatives, 87pc of consumers drink cow’s milk, and 94pc of adults buy cheese.