A no-deal Brexit would add 21.15c/l to the cost of processing cheddar for the UK market, analysis by Dairy Industry Ireland shows.

The knock-on effect on milk price would cost the rural economy €116m, it says.

The higher cost includes the weakening of sterling, border and customer controls, as well as tariffs on raw materials for cheese and on sales to the UK.

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Cheese is Ireland’s largest dairy export in terms of volume. Almost half of Ireland’s €800m in cheese exports last year went to the UK.

In the event of no-deal Brexit, WTO tariffs on cheddar sales from the Republic of Ireland to the UK would cost almost €162m, based on 2016 volumes.

Dairy Industry Ireland presented a list of demands to Minister for Agriculture Michael Creed on Tuesday, with less than 70 days remaining until Brexit.

“The dairy sector on both sides of the border would be particularly exposed to very high tariff and regulatory barriers in the case of no-deal, with the potential for major trade and economic disruption to farmers and industry,” director of DII Conor Mulvihill said.

Transition period

The dairy industry is calling for a transition period, even in a no-deal scenario, which would freeze the imposition of tariffs.

DII also called for trade support measures, direct income aid for farmers, streamline issues around exports and veterinary, avoid regulatory divergence and a multi-annual framework for funding Brexit mitigation.

DII says that direct supports would be needed for companies that need to re-invest in plant and machinery to produce products for new markets, as well as additional marketing and innovation supports.