Monthly Finance News Magazine dedicated to reporting the key financial stories of the day from across the globe for an international corporate readership.

Food Giant Mars Says Your Snickers Might Cost More if Brexit Deal is Weak

0

In a keynote speech to the American Chambers of Commerce, in Brussels last week, Fiona Dawson (Global President of Mars Food) warned that failure to reach a new UK-EU free trade agreement for food would threaten jobs and lead to higher consumer prices.

Noting that protectionist trends are threatening to undermine global trade and make the world less connected, she noted that the future relationship between Britain and the European Union is a critical test as to what future will unfold. Specifically she:

  • highlighted how a return to trade barriers would undermine integrated supply chains, which are vital in the large food sector;
  • warned that the higher business costs arising from such trade barriers would ultimately flow through to consumers in higher prices and could threaten jobs;
  • cautioned that regulatory divergence could undermine future UK-EU trade, and should be avoided;

Jobs and Consumers Must Come First

  • urged all parties to the Brexit negotiations to focus on the mutual benefits that close UK-EU economic ties provide; and
  • emphasised that politicians must put workers and consumers at the forefront of Brexit negotiations.

Key extracts published pre-speech:

“Brexit clearly poses some problems, but the fact is Britain has decided to leave the EU and the task now is to look forward and ensure that the decisions taken from this point forward achieve the most positive outcome for all concerned.”

“The absence of hard borders with all their attendant tariff, customs and non-tariff barriers allows for this integrated supply chain, which helps to keep costs down. The return of those barriers would create higher costs which would threaten that supply chain and the jobs that come with it.”

“If Britain ends up trading with the EU on the basis of WTO rules, ‘Most Favoured Nation’ rates would come into force. In the area of confectionery that alone would mean tariffs of around 30%. For animal products, it would be 20%; for cereals over 15%; and for fish and fruit over 10%. Significant new tariffs would also apply outside the food sector, notably in the area of clothing and textiles. Unfortunately there is no way that those costs could be absorbed without flowing through to consumers in the form of higher prices.”

“It is a fact that Europe after Brexit will remain a critical market for UK exports and likewise the UK will remain an important market for goods produced and manufactured in other European states. There can be no economic advantage either side restricting trade with a large market situated on its doorstep. In simple terms, if the UK and the EU fail to agree on a new preferential deal, it will be to the detriment of all.”

“Reaching an agreement will require compromise and an appreciation of the economic interdependency between the UK and EU. It requires an acceptance of the benefits that common regulatory standards and the movement of labour can bring, and an understanding that the imposition of significant trade barriers would ultimately hurt everyone and undermine, rather than strengthen, European unity.”

“Other member states should remember this is not about ‘punishing’ Britain for her decision to withdraw but rather about finding the best solution for European and UK workers and consumers. That consideration must come first as we build the future.”

(Source: Mars, Incorporated)

Comments
Loading...