The Meat Corporation of Namibia (Meatco), as Namibia’s flagship meat exporter to Europe, is ready for the worst case scenario if the United Kingdom (UK’s) Brexit means exiting and cutting all ties with the European Union (EU) later this month.
A total of 27 other countries within the European Union are committed to buying Namibia’s products. Besides that, new markets such as China and the United States of America (USA) have opened up. Soothing the increasing fears expressed two weeks ago during a meeting of the livestock marketing sub-committee of the Meat Board of Namibia, chief of corporate affairs at Meatco, Rosa Thobias, is assuring that even in the worst case scenario, Meatco is fully prepared for the future and the corporation has another 27 countries in its sights. “So this means exploring more avenues that are better and willing to pay the maximum return. We are willing to move the product into these new markets should the need arise,” she states.
If a no-trade deal is accepted, the Namibian exports to the United Kingdom could be in jeopardy. In the event that a no-deal with trade agreements materialises, Namibia and the South African Customs Union will require a specific new agreement or Namibia will operate under the MFN (Most Favoured Nation, World Trade Organisation mechanics) which requires an ad valorem duty of 12.8 percent and a specific duty of €3041 (N$49 600) per tonne to be paid for imports into the UK. Meatco’s prime beef exports to international markets account for 68.26 percent of the value of the corporation’s sales, and is thus vital for the sustainability of its business.
On the consequences for Meatco’s meat exports if a Brexit with no trade deals materialises, Thobias says Meatco has been informed that the Southern African Customs Union (Sacu) and the UK government have negotiated 95 percent of how a new Sacu/UK agreement would work and this maintains the rights as per the current EU/ Economic Partnership Agreement (EPA). Meat exports to the UK makes up about eight percent of Meatco’s total exports. “Obviously, we all hope that this 95 percent will be 100 percent before the UK Brexit happens. However, these negotiations are between government and not Meatco or commercial businesses, so I cannot comment further,” she notes.
Thobias says the outcome depends on whether the UK Brexit will deal with the EU or not. “Currently the Economic Partnership Agreement (EPA) is the agreement by which Namibia enjoys duty-free, levy-free access for our beef products into the EU. Under this agreement as a member of the EU, the UK currently operates as well. Depending on how the UK Brexit will determine the required mechanics going forward. If the UK agrees a deal with Europe then we continue under the EPA to access the UK through the customs union agreement as we understand the situation. This would continue until a specific SACU/UK deal is concluded,” she observes.
Thobias stresses that no trade will come to a standstill, with Meatco constantly seeking to exploit its value chain by placing greater emphasis on the quality and unique characteristics of its beef. “Meatco has developed the Natures Reserve brand of products, which – along with the Meatco brand – acts as a vehicle to extract the maximum value from international markets for the corporation’s livestock producers. Meatco’s Natures Reserve brand, established in 2007, has opened up free-range beef marketing channels and serves various international customers,” she notes.
Meatco recently got approval to serve premium meat to Greene King, a company founded in 1799 that owns approximately 3,000 outlets in the United Kingdom (UK). This exciting venture could also be in jeopardy if a Brexit with no trade agreements materialises. Meatco’s key international markets in terms of sales revenue remain Norway, the EU and the UK. These markets, together with the Asian market, make up only 35.37 percent of the total volume, but the sales revenue is much higher at 68.26 percent of total sales revenue.