Additional facilities in NI as a result of the upcoming merger with LacPatrick mean Lakeland Dairies can process its NI milk pool in the event of a no-deal Brexit, the dairy co-op’s chief executive has said.

Speaking at an Ulster Farmers’ Union event near Derry on Wednesday, Lakeland chief Michael Hanley said that getting milk across the Irish border is therefore not his main concern if the UK leaves the EU without a withdrawal agreement.

Instead, he suggested it is future trade that is his main issue.

“The EU has 53 free trade agreements with other countries across the world, in a no-deal Brexit scenario those fall away on 30 March, so what markets can products go to?” he asked.

Hanley said that the dairy co-op could not sell all its products from NI-based factories into the UK domestic market. He gave the example of LacPatrick’s drier in Artigarvan, which manufactures skimmed milk powder mainly for export markets in Africa.

“If we got a transition period of two years, you could do a lot to change a product line to something else if you knew there would be a market for it.

“That’s why we need a transition period,” he said.

Fantastic deal

The draft Brexit withdrawal agreement, which was voted down in the House of Commons last month, was described by Hanley as “a fantastic deal” for NI agri food.

“We could continue to trade into the EU, continue to have their free trade agreements and continue to sell into the UK. It is the best of both worlds. That’s the way we see it. It’s the economics of it, it’s not the politics of it,” he suggested.

The Lakeland boss said that his other major no-deal Brexit concern was that the UK government removes tariffs on imports to kept food prices down for consumers.

“The GB market could go from being one of the most lucrative markets in the world to being a dumping ground for product,” he maintained.

LMC warning

Meanwhile, the Livestock and Meat Commission (LMC) has also warned about the economic impact of a future policy that allows in food imports to the UK tariff free. If this happens, the LMC warns the NI beef and sheep industry stands to lose an estimated £230m/year, suggesting that such a loss would be “disastrous”.

“The potential implications for the NI sheep sector are particularly stark under any no-deal trading situation,” said LMC economist Seamus McMenamin.