Meatco confident on post-Brexit beef exports – offers no tangible contingency plan for disruptions
Meatco has displayed confidence that its beef exports to the United Kingdom will remain unaffected if Brexit happens, based on the “good quality” of its products, but the red meat utility failed to present a contingency plan for access to the European Union if the logistical link through London is severed.
“Meatco products are suited for niche markets, the clients know the quality of Namibian beef, many clients will continue buying the product due to its quality,” said Meatco’s senior corporate communications officer, Jethro Kwenani. Meatco sales to the UK make up only 5% of total sales to the EU.
The lack of action on Meatco’s side has assumed an ominous overtone following the new UK leader, Boris Johnson’s resolve to take his country out of the UK by the end of October with or without a deal with the EU. In the meantime, during July this year, the United States has also reached an agreement with the new British administration to open their market to significantly increased US hormone-free beef quotas. This product will compete directly with Meatco’s beef in the UK market.
Kwenani said Namibia is a net meat exporter and the EU market is a prime niche market for Meatco, with the company’s sales to the UK currently representing 5.2% of overall value.
When asked about a contingency plan for a post-Brexit market, Kwenani referred the Economist to the Ministry of Industrialisation, Trade and SME Development, “as export in general relates to national affairs. The Economic Partnership Agreement (EPA) with the European Union is a good reference point.”
However, according to EU representatives, the EPA will only be beneficial if the UK leaves the EU with a deal. Currently, under the EPA, Meatco exports beef to the EU without duties. If the UK exits and cuts all ties with the EU, then Meatco will be required to come up with a new logistical chain, bypassing London, to continue having access to the EU market. A further scenario is that meat consignments from London to the EU, will be subject to the normal EU import duties.
Earlier this year, EU Ambassador to Namibia, Janna Hybaskova said that Brexit could cause difficulties for export-reliant economies doing business with the EU.
“We strongly advise Meatco to move out of the UK because Brexit is going to happen. The company needs to be established throughout the rest of Europe, be it in Paris or Frankfurt. Therefore, my strong advice would be to move their European representation from London to some other capital within Europe,” Hybaskova said.
Trade and SME Development, Minister, Hon Tjekero Tweya, earlier this year also said Namibia is putting measures in place to protect its beef exports to Europe against the possible repercussions of Brexit by exploring new and direct markets among the current European Union member states. However, it is not clear what the exact measures are, yet.