How restaurants and agriculture could be affected
Brexit: The strange portmanteau has dominated headlines for the past week as the entire world watched and waited — would the UK stay part of the European Union, or would it go out on its own? This morning America woke up to learn that a majority of citizens in the UK voted in favor of the referendum, and now the big question is, what happens next?
52 percent of British voters came out in favor of Brexit, and already the effects have been swift and far-reaching: The pound has plummeted to its lowest point since 1985, affecting markets worldwide, and Prime Minister David Cameron has plans to step down. (Meanwhile, Donald Trump came out in support of Brexit, which is reason enough to be wary.)
Here now, a brief examination of what Brexit could mean for food and restaurants in the UK.
What is Brexit?
Brexit is a portmanteau of Britain and exit, and is shorthand for the United Kingdom leaving the European Union. The EU is made up of 28 countries and was formed as a way to socially and economically unify a continent that was torn apart by war following WWI and WWII. They are unified by a single currency, the Euro — except the UK, which still uses the pound sterling — and citizens enjoy largely unrestricted immigration among its member countries.
The latter aspect is precisely what spurred the UK to want to leave the EU: As Vox explains, “British voters are pushing back against a huge surge in immigration that’s taken place over the past decade.” The UK’s foreign-born population more than doubled in size between 1993 and 2014, stirring up xenophobia among many Brits who worry immigrants are taking their jobs and watering down their culture.
What does it mean for agriculture in Europe?
Many believe the newfound autonomy that will result from the EU exit will be a good thing: Some UK farmers resent the EU’s influence, citing policies like an impending ban on glyphosate (the country’s most widely used herbicide) and the EU’s ban on GMO crops as overly restrictive. Polls indicated that roughly 60 percent of farmers were in favor of Brexit.
However, the EU also provides subsidies for UK farmers and its lenient immigration policies among member states are a major source of cheap labor. The UK’s environment secretary has warned that Brexit would be “a leap into the dark,” saying “The years of complication and risk caused by negotiating withdrawal would be a distraction from our efforts to build a world-leading food and farming industry that brings jobs and growth to Britain.”
Meanwhile, retailers are saying Brits could see their grocery bills rise, warning that “a drop in the pound coupled with supply chain disruption would cause prices to spike.”
Whatever the effects turn out to be, they will be huge: The food industry (which includes farming) is the UK’s biggest manufacturing industry and brings in around £11 billion annually.
What does it mean for Britain’s prized native foods?
The EU’s Protected Designation of Origin status provides safeguarding for many traditional native foods, such as Scotch and Stilton cheese. An exit from the EU would cause protections for such foods to disappear, meaning potentially anyone could label their whisky “Scotch” without penalties — however, distillers and cheesemakers shouldn’t panic just yet, as such foodstuffs could be protected using international trademark law as they were before Britain joined the EU.”(Fish and chips is probably safe, anyway. Whew.)
What does it mean for restaurants?
Much like the U.S., the UK’s restaurant industry is largely dependent on immigrant labor — but what, exactly, Brexit will mean for that is currently unclear.
28 percent of the UK’s restaurant industry is foreign-born, with approximately half of those from other EU countries; immigrants typically work for lower pay and are viewed as “more productive”. Restricted migration from other European countries such as Poland and Romania could result in higher labor costs for restaurants, and potentially cut into profits.
On the other hand, restaurants that depend on the labor of immigrants from non-EU countries argue that the EU’s policies on immigration from countries like India and Bangladesh are much too restrictive. This has led to a kitchen staff shortage at the UK’s beloved Indian restaurants that has resulted in hundreds of closures. Some hope that an exit from the EU and an overall drop in immigration will mean the UK can lift some of its restrictions on migrants from non-EU countries, easing the burden of the chef shortage.
Meanwhile, restaurant industry groups in Ireland are concerned that Brexit will hurt business. The nation’s restaurants (and its tourism industry as a whole) service millions of British tourists each year, and changing rules at the border could make movement between the two more difficult.
How long will it take for these changes to take full effect?
Much like, say, big corporate mergers, a move of this magnitude will take time to execute. As Vox explains, the Brexit vote is not legally binding, and could potentially be overturned — although such a move would be “political suicide” for whoever led that charge. The UK’s exit will be negotiated over the next several months, and the actual withdrawal process will at least two years.