The UK left the EU bloc in January 2020, and eventually exited its trading regime in 2021. A little over a year after Brexit, Welsh companies are already reporting the strain of losing a significant portion of sales from Europe. Hiut Denim Co. recently reported a 36% drop in sales to the BBC, whereas Pero Foods, based in Conwy county, reported their trade with Europe had fallen by 86%.
Will the EU Continue to Be a Top Trading Destination for Wales?
In 2019, Welsh sales to the EU accounted for 60.4% of the country’s total exports. Germany and France were the top two destinations of Welsh exports, equating to £2.9 billion (16.2% of Welsh total) and £2.8 billion (15.9% of Welsh total), respectively. Since Brexit, trade from Wales to Germany has suffered. There is a strong possibility that Wales will have to seek out non-EU countries to make up for the loss in trade it is seeing with its EU partners. Red tape and extra bureaucracy surrounding moving goods out of the UK are considered to be a major factor of this downturn in trade, factors that will not likely change in the near future.
Welsh Lamb Destined for Non-EU Countries?
For decades, Welsh lamb has been renowned around the world. Sheep farming in Wales dates back to the 14th century, and the sweet meat is now known all over the world. Before Brexit, exports of Welsh lamb equated to around £125 million each year. However, since the UK left the EU, there has been a decline in Welsh meat exports.
Much of this loss in business for Welsh lamb exporters has been linked with the increased costs and bureaucracy associated with exports that have been implemented since Brexit. These changes are threatening the future of Welsh meat exporters. In particular, small businesses may suffer due to being unable to absorb the hiked administration costs. Often, their exports cannot fill an entire lorry, so they look to combine their products with another load. Lamb is frequently included in these "multi-drop" exports, in which up to thirty consignments can be combined into a single delivery. Because of increased paperwork, many transport companies are now declining to accept combined loads, as a problem with the paperwork for one export can hold up the rest.
The increased paperwork, as well as additional vet inspections, have led to costs per exported lamb rising by £1.20. In addition to these increased costs to export to the EU, Welsh companies are suffering from delays at the border, costing drivers’ wages and loss in productivity. The Welsh lamb sector must thus export 35% of its annual production volumes in order to maintain its profitability. This proportion is set to rise to 50% this year. With the loss of EU customers, the Welsh lamb industry will benefit from establishing ties with non-EU countries.
Fortunately, US President Joe Biden announced last year that the country would lift a 25-year old ban on imports of British lamb, an agreement which could result in £20 million a year in trade for Welsh farming and help it to recover from the negative impacts of Brexit.
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