Making social science accessible

06 Apr 2023

Economy

Policies

UK-EU Relations

Shane Brennan, Chief Executive of the Cold Chain Federation, unpacks the likely impact of the government’s recently announced plans for controls on food imports from the EU to the UK.

For UK food supply chain businesses, it’s time to get Brexit done (again). We knew the day was coming, we’ve been led up the hill at least twice already. At some point, the UK must have controls to screen food entering our country from the EU, the same as countries do at every hard trade border in the world. Just because it must happen, does not mean it will be any less painful.

There have been many promises, delays, and resets up to this point, but it turns out the new border operating model is not really going to be that different from what was envisaged on day one or what the EU has already imposed on us.

It’s going to make things a lot harder, slower, and more expensive. The result will be fewer choices on the shelf and higher food prices than there would otherwise be.

There are many other reasons why this day has come, there has been increasing alarm amongst the veterinary sector and domestic food producers that the UK is facing increasing risks. They warn that our ‘uncontrolled border’ makes us vulnerable to food fraud and animal disease coming into UK market. It is also technically illegal for us to give businesses in the EU market preferential treatment, not controlling their import the same way we do other trading partners.

Most of all though, there is simmering resentment about the embedded unfairness of our post-Brexit food economy. UK-based food exporters have since 1 January 2021 faced the full weight of sanitary and phytosanitary controls when sending goods to the EU, whilst EU based food producers can compete for UK customers without these burdens.

The new food import control model is not all bad. Good people have been working very hard, for many years to try and find innovations. The explicit commitment to a risk-based categorisation of foods means that vast amounts of foods will be classified as low risk, mainly fruits and vegetables, and shelf stable products. By volume, this will be most imports. Importers of low-risk goods will have to do less certification and face low to zero inspections at the UK border.

This is good. But they can be classified low risk for a reason and would have faced relative light touch requirements and inspection risk anyway.

The problem is if you are importing medium-risk goods like most meat, dairy and fish goods. For you, there is very little innovation at all. Every order of these goods that comes to the UK post 31 October this year will have to be accompanied by a physical export health certificate, signed at the point of dispatch by a qualified vet.

This has always been the problem area and six years of searching for a solution has come to not very much. To illustrate the issue – if I am a producer of buffalo mozzarella in northern Italy, or of chorizo in western Spain, as of 31 October I will for the first time (possibly ever) be asked to become an exporter, and I must:

  • train myself up on the complex international and UK rules;
  • find a local vet that is willing to certify my goods, at site (at a cost of 200 to 700 euros a time);
  • find a specialist haulier, usually on a lorry carrying goods from other local food producers with the same compliance burdens;
  • employ an agent to ensure the data entries onto the UK’s food import IT system, alongside customs declarations, at maybe 50 to 200 euros a time; and
  • as of January 2024, pay a new border inspection charge of up to £43 irrespective of whether my consignment is physically inspected or not.

These new burdens aggregate up to millions of pounds in friction costs. The reality is that many EU based food producers will take the decision not to service the UK anymore. That is exactly what happened for as many as a third of the UK based food producers immediately after 1 January 2021. They will make the practical, logical, choice to divert sales from the UK to the domestic (single) market where there is more than enough demand.

Not every business will take this view, and of course the UK will still get food, but we will have to build more complex consolidation and wholesaling models. More links in the chain means less flexibility, less pace and above all more cost that will be to the detriment of UK consumers.

There is always opportunity in adversity. This may be the point at which post-Brexit realignments in how we source our food will fully play out. For some the hope will be greater reliance on domestic production, others will see a rebalancing of our import trade away from the EU suppliers to other places in the world. Whether the result is good or bad for the UK economy, our climate goals, or UK consumers, remains to be seen.

This is perhaps the last Brexit-transition sticking plaster that we have to rip off, but don’t believe them when they tell you it’s not going to hurt.

By Shane Brennan, Chief Executive of the Cold Chain Federation.

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