Scottish food and drink industry warns Brexit and US trade tariffs could thwart a Covid recovery

Scotland’s food and drink industry faces a triple whammy as the coronavirus pandemic, US trade tariffs and Brexit pose costly challenges to the sector.

Speaking before the Scottish Affairs Committee, Karen Betts, the chief executive of the Scotch Whisky Association, warned that while the industry has been hamstrung by Covid-19, US tariffs introduced in October 2019 pose an even greater threat in the long term.

In the first six months the tariff was in place, Karen said exports of whisky to the US, its largest and most valuable market, fell by 25%. In April, the combination of the tariff and the Covid-19 crisis led exports to fall by 47%. “This US tariff issue is a more strategic threat to the industry than Covid because there’s a risk that we lose longer-term market share that takes a very long time to win back.”

According to James Withers, chief executive of Scotland Food and Drink, the industry is looking at a loss of up to half of its normal export value in 2020, or around £800m – and that’s assuming the sector begins a gradual recovery.

James warned that a no-deal Brexit would hamper the industry’s ability to bounce back from the impact of Covid. Of the £1.8bn of Scottish food exported last year, £1.2bn went into the European Union, he said. “The real fear is that we just start getting into a recovery phase post-Covid, and then face the impact of an effective no deal.”

“Brexit was going to be a huge hurdle to be overcome, anyway. If we don’t get a tariff-free trading regime on the back of Covid, there’s no glossing it – it’s a huge concern.” With the government focused on Covid, he added that the UK and Scottish governments haven’t made any preparations with the industry or discussed what a no-deal Brexit would look like.