County Durham’s Prima Cheese has said it may need to cut staff if the UK goes ahead with a no-deal Brexit.
The Seaham company in producing shredded cheese, which is mainly used on pizzas, and has undergone major growth in the North East over the last 10 years.
But operations director Nima Beni has warned that the company may have to consider making some staff redundant if the UK leaves the EU without a trade deal.
Mr Beni said operating on World Trade Organisation (WTO) tariffs would lead to higher prices in the UK but would also make it uncompetitive overseas.
Around 25% of Prima Cheese’s business is in exports, with the company shipping its products to 45 countries around the world. It is this side of the business that is most at risk from a no-deal Brexit.
“If we go to WTO tariffs then we are not competitive with our European competitors,” said Mr Beni. “Then a proportion of that 25% is going to be reduced. We have been exporting since 2010, that is 10 years of expanding our export business that could disappear overnight.
“If we don’t have that 25% export business, we’d have to go down to how we worked in 2010, and we had much fewer people than we do now.”
When asked if the company would have to make staff redundant, Mr Beni said: “We can’t completely rule it out but we are not making any plans for redundancies.” At the moment Prima Cheese is continuing to grow, with the company making hires in its production team, but that growth could be put on hold after the new trade terms come into force on January 1.
Along with impacting its export business, Prima Cheese is also expecting to have to increase its prices in the UK due to the additional cost of importing raw ingredients from Europe. One of the main problems facing the company is sourcing ingredients, which is not possible in the UK. Mr Beni said: “There are products that we have where there are no UK alternatives – our main product being mozzarella cheese. Every company using mozzarella cheese has to buy it from Europe.
“There are only two producers of mozzarella in the UK, one in Northern Ireland but they don’t have the capacity to sell to everyone, and the other supplier just makes it for themselves.
“Then we have to look at milk. There is not enough milk produced in the UK to supply the whole market. That goes for dry milk (baby milk), to mozzarella, to cheese strings that children eat, to yoghurts.
“There is not enough infrastructure in the UK. We have to buy from Europe.”
A number of deadlines for a Brexit deal have passed, with the UK’s transition period set to come to an end in just over a month.
Lord Frost, the country’s chief negotiator, has said that a Brexit deal is still possible, but only if Brussels recognises British sovereignty in key areas.
