Arla - warning about the implications of a hard Brexit deal.

Arla - warning about the implications of a 'hard Brexit' deal.

European dairy heavyweight Arla Foods has painted a bleak picture of the situation that could face UK consumers post-Brexit.

The cooperative says border breakdown could leave UK consumers with less choice and higher prices when it comes to dairy produce.

At an event to be held today at the London School of Economics (LSE), Arla will warn if the findings of a LSE report prove true, non-tariff barriers to trade and restricted access to labour after Brexit - Britain's departure from the European Union next March - will leave UK consumers facing a situation in which the availability of butter, yogurt and cheese become restricted.

The Government's White Paper on the UK's future relationship with the EU sets out proposals to ease trade between Britain and Europe but this is still to be agreed with the EU. The LSE reports warns any friction and any limitations on access to key skills post-Brexit means UK consumers will pay the price through less choice, higher prices, and potentially lower food standards.

Arla will today outline a number of possible outcomes. One is it will become much more difficult to import dairy products from Europe, leading to a shortage both of dairy staples and particularly of products such as speciality cheeses, where domestic supply is constrained by limited production capacity in an already tightly managed supply chain.  

It also fears escalating pressure on costs, and ultimately increased consumer prices for dairy goods. Dairy imports include cheese, butter, butteroil, whey, buttermilk and fermented products, yogurt, concentrated milk, powders, milk and cream, infant formula and ice cream, meaning that the impact could be widespread.

And Arla warns of increased times for customs inspections at UK ports, with even a seven-minute additional waiting period for each inspection adding hours of delays and additional costs per container.

Arla, the largest dairy business in the UK, has previously noted that a 'hard Brexit' without a trade deal could have a disastrous impact on the country's dairy industry and its consumers.

Ash Amirahmadi, the managing director of Arla's UK arm, said: "The farmers that own the Arla dairy cooperative already balance keeping consumer prices down with maintaining quality and the best standards, including high animal welfare. There's no margin to play with here in the value chain.  

"Any disruption means that if we don't get the practicalities of Brexit right we will face a choice between shortages, extra costs that will inevitably have to be passed on to the consumer or undermining the world-class standards we have worked so hard to achieve.

"Our dependence on imported dairy products means that disruption to the supply chain will have a big impact. Most likely we would see shortages of products and a sharp rise in prices, turning everyday staples, like butter, yogurt, cheese and infant formula, into occasional luxuries. Speciality cheeses, where there are currently limited options for production, may become very scarce.

"It is important to be clear about this: Brexit might bring opportunities to expand the UK industry in the long term, but in the short and medium term we cannot just switch milk production on and off. Increasing the UK's milk pool and building the infrastructure for us to be self-sufficient in dairy will take years.

"To protect the British public we are calling on both sides in the negotiations to be pragmatic and sensible as they address the practicalities of Brexit, allowing us to have frictionless customs arrangements and ready access to key labour in the years ahead."