It seems that there will be winners and losers in the coffee industry whether or not there is a deal on Brexit. But what does this mean for the average Joe drinking their cup of Joe?
Brexit might be tough for the high street chains such as Costa Coffee and Starbucks but brewing your Kenyan Espresso at home may about to get cheaper. So how does that even make sense?
It seems that the issue is not the price of importing coffee beans. The UK already pays the highest price per kilo for coffee as a current fully paid up member of the EU. The European Union currently imposes a 7.5% tariff on coffee which critics say is unfair to European consumers and farmers alike. Germany imports nearly 1.5 million tonnes of coffee per year, much of it for re-export. Indeed both Germany and Belgium are among the top ten exporters of coffee though neither country grows coffee. “The United Kingdom is more expensive because it is a refined market,” says Katrie Pauwels, co-owner of OR Coffee Roasters, a specialty coffee roaster based in Belgium, “ Coffee roasters here produce a very high quality product.
The numbers make clear that coffee is in increasingly popular in the UK. The British Coffee Association (BCA) reports that coffee consumption has grown around 27% during the last decade, outstripping demand for other commodities. In 2008, Britons were consuming 70 million cups per day. As of 2018, that figure had risen to drinking 95 million cups a day according to the BCA. But this still doesn't explain why coffee prices may go up in the high street and down at home.
For the high street it seems that the impact will be due to a shortage of Baristas. With lower immigration there may be less people willing to do this tough job and learn the skills needed for the ever growing industry. This will, of course, also impact many areas of the hospitality sector. Costa Coffee, for example, reports that some 20% of its staff are not British citizens. It supports the so-called Barista visa proposal which would allow short-term working visas for some positions.
Graham Stringer, who is a pro-Brexit Labour member of parliament, takes a different view of Coffee economics. He thinks Brexit has the potential to offer relief to British consumers and African farmers. “If you take coffee there is a huge barrier to processed coffee coming from Africa,” he is quoted in an interview with The Express. “It means that Germany makes more money from processed coffee – because there are barriers – than the whole of the African continent make from exporting it because of the barriers.”
When Theresa May visited Africa recently she reaffirmed her commitment to increase trade with the Commonwealth from £393 billion at present to £492 billion by 2020 after Brexit. This is expected to reduce trade costs by as much as 16% for some developing countries. The initiative will also cut the average time needed for goods imports by 47% ensuring more agricultural products arrive in the United Kingdom fresh and ready to use.
So with the chance of lower import prices for coffee coupled with a real chance of staff shortages across the coffee high street the future really does look uncertain.