AIPH on the implications of Brexit for ornamental horticulture

In the short term the main impact of the Brexit vote will be from the change in the exchange rate between the pound and the euro, according to AIPH. The pound has weakened following the Brexit vote. If this continues, then over a period of time the UK may seek to reduce its import of plants and flowers from the EU and increase home production. But, in reality the UK has lost much of its production base for cut flowers and other aspects like energy and labour costs still make an increase in glasshouse production of ornamentals in the UK unlikely. Growers of outdoor container plants may lose some export trade to the UK. However, exchange rates always do fluctuate and it may be that this is just a short-term shock. Growers and importers/exporters cannot make strategic decisions based on what we know so far.

The UK is a net importer of flowers, bulbs, trees and ornamental plants by a significant margin so, in theory, this should mean that the EU will argue to maintain the current situation for trading in these products. However, the reality is that it is unlikely that this small subset of UK/EU trade will be given special treatment so the outcome will depend on an overall trade deal.

The content of any overall trade deal will depend on the degree of flexibility shown by both sides on the other aspects that are of such critical concern to the UK. These relate to the free-movement of citizens and EU regulation. Undoubtedly the main reason why the UK voted to leave the EU was because of the perception that free-movement has taken immigration to unacceptably high levels and that this will get more severe in the future, further threatening employment and living standard prospects for UK citizens. The final trade agreement achieved will depend on whether a compromise can be reached on this issue. It is unlikely that an arrangement, such as that with Norway, which gives free trade access but also ties them in to free-movement and EU regulations, would be acceptable to the UK. The Swiss model is also not very smooth for the EU so it seems that a new relationship model will be required with the UK.

Despite the way the vote went, the reality for UK horticulture is that access to labour from outside the UK has become critical for business success. Many horticultural producers in the UK rely heavily on a workforce sourced from other countries like Poland, Bulgaria, Romania, etc. These workers are willing to work hard for wages and conditions that are not tolerated by many UK citizens. Any reduction in access to this labour supply will certainly increase labour costs for UK growers and reduce productivity.

Read the full AIPH statement on their website.