Hard Brexit expected to hit Danish bacon, butter exports to Britain
Organisation for Economic Co-operation and Development says food imports from Denmark will drop about 24% if the UK exits the EU without a deal
The flow of Danish butter and bacon to British breakfast tables was expected to fall by about a quarter in event of a hard Brexit, the Organisation for Economic Co-operation and Development (OECD) said on Tuesday.
Denmark’s food exports to Britain, which totalled 11-billion Danish krone ($1.7bn) in 2017, are set to drop about 24% should Britain exit the EU without a deal, leaving goods subject to World Trade Organisation tariffs, the OECD said.
Britain’s parliament is widely expected to vote against Prime Minister Theresa May’s Brexit deal on Tuesday, opening up outcomes ranging from a disorderly divorce to a reversal of Brexit.
Britain is Denmark’s fourth largest export market absorbing 7.8% of total exports in 2017. Denmark is the main supplier of Britain’s imported pork.
Denmark’s overall exports to Britain could drop 17% in the event of a no-deal Brexit, resulting in a 1.3% decline in GDP in the medium term, the OECD said in a country report on Tuesday.
The Danish government said in December that a hard Brexit could reduce the economy as much as 1%.
The OECD said it expected Denmark’s economy to grow 1.9% in 2019, slightly above the 1.7% expected by the Danish government, and 1.6% next year, in line with the government forecast.
Danish fisheries were “very dependent” on continued access to British waters. Of the total volume of fish unloaded by Danish fishermen in 2012-2016, about 45% came from British waters, a 2017 report showed.
The OECD also said Danish household debt, the highest across the 34 OECD countries, was a “source of vulnerability”, even though it was somewhat counterbalanced by large pension savings.