UK & Ireland: Cans of Guinness could be an unexpected casualty of Brexit
Cans of Guinness could be an unexpected casualty of Brexit if a new customs border or tariffs are introduced between the Republic and Northern Ireland when the UK leaves the European Union, it has emerged.
Guinness is one of Ireland’s most famous exports but Brexit will have a direct impact on its production as the black stuff crosses the Irish border twice before being shipped from Dublin to Britain and beyond, The Guardian reported on April 7.
The stout is made at the St James’s Gate brewery in Dublin. The drink is then pumped into tankers, known as “silver bullets”, and driven 90 miles to east Belfast where it is canned and then sent back to Dublin Port for onward distribution.
Diageo, the Guinness owner, confirmed in a Bloomberg report on April 7 that it had estimated a so-called “hard border” could cause delays of between 30 minutes and an hour, costing an extra €100 (£85) for each lorry-load of Guinness.
Each year the company makes 13,000 beer-related border crossings in Ireland and Guinness contingency plans estimate the delays could amount to €1.3 mln in additional costs a year.
Diageo would either be forced to absorb that cost or pass it on to the consumer by raising the cost of a pint.
All Guinness consumed in Britain has been produced in Dublin since Diageo closed the Park Royal operation in north-west London 12 years ago.
Another brand owned by Diageo, Baileys liqueur, is also of concern in Ireland as some of its ingredients cross the border with Northern Ireland three times before its journey to Britain.
The majority of cream from dairy milk in Baileys is produced in the Republic but Diageo confirmed that some comes from farms in Northern Ireland. The finished product is then sent to Belfast for bottling before returning to Dublin for export.
There is political backing for maintaining a relatively open border between the Republic and Northern Ireland, with Irish, British and European leaders supporting the unique status of Ireland in the Brexit process.
However, the European Union has admitted there is no firm plan for how to achieve this, saying “flexible and imaginative solutions will be required” to square the legal circle, which requires the Republic to operate customs of what will become an external border between the UK and the EU when Britain leaves the union.
All-island Irish businesses that have flourished since the disappearance of the border when the single market came into being in 1993 are now facing up to the cost of Brexit.
The Northern Ireland director for Dairy UK told the Northern Ireland affairs committee this year that farms would “go out of business” if barriers to trade on the island were introduced.
About 25% of Northern Irish milk goes south of the border to be processed, with cheese from the Republic going north to be packaged and exported again through Dublin Port. If tariffs are introduced those journeys may no longer be viable with margins so tight in the food sector.
The Freight Transport Association in Belfast says nearly all food exports in Northern Ireland will impacted because so much of the produce from the six counties is exported through Dublin Port to Holyhead, the gateway for Britain and beyond.
It is favoured by fresh food producers across Northern Ireland because it offers the quickest route to food processors in Wales and the midlands or supermarket shelves in Manchester, Birmingham and London.
“We have suppliers here who have meat which leaves here at 6.30pm and is in south east England at 6.30am the next day,” said Seamus Leheny, head of policy for Northern Ireland for the FTA.
“Some of these suppliers are now having to consider whether they can continue withe meat processing here or whether they move it to the UK.”
Kegs of draft Guinness being exported to the UK will also be impacted with customs expected to be reintroduced at Holyhead.
Like all big name exporters, however, they are expected to continue with “trusted trader” status which will rule out random customs checks.
07 April, 2017
