Food and Drink

Globally the food and drink sector is typically most affected by trade barriers, with both the highest levels of tariffs and the most onerous non-tariff barriers (typically sanitary and phytosanitary or SPS measures). It was therefore unsurprising that this sector has been at the centre of stories about the impact of the changes to UK trade from January 1 2021. The change was particularly abrupt for movements from Great Britain to the EU and Northern Ireland, the latter due to the provisions of the Northern Ireland protocol.

This meeting looked at UK food and drink trade, and the impact of changes that came into force on January 1 2021, how they can be mitigated, and the way this may change for better or worse in the future. There was a particular focus on Northern Ireland, which is being treated as part of the EU in terms of rules covering goods products. 

Different products and sizes of exporter are affected in different ways, with potentially different solutions, so we asked witnesses to seek specific examples wherever possible. The impact of delaying checks on products coming into the UK was also considered.

Aodhán Connolly, Director Northern Ireland Retail Consortium, chaired this session.

Witnesses

• Emily Rees, Senior Fellow at ECIPE and Managing Director at Trade Strategies

• Karin Goodburn, Director General of the Chilled Food Association (CFA)

• Nick Allen, Chief Executive Officer of the British Meat Processors Association (BMPA)

• William Bain, Policy Advisor at the British Retail Consortium

INTRODUCTION

Globally the food and drink sector is typically most affected by trade barriers, with both the highest levels of tariffs and the most onerous non-tariff barriers (typically sanitary and phytosanitary or SPS measures). It is therefore unsurprising that this sector has been at the centre of stories about the impact of the changes to UK trade from January 1. The change has been particularly abrupt for movements from GB to the EU and Northern Ireland, the latter due to the provisions of the NI protocol.

This session looked at UK food and drink trade, the changes that came into force on January 1, their impact, how this can be mitigated, and the way this may change for better or worse in the future. There was a particular focus on Northern Ireland, which is being treated as part of the EU in terms of rules covering goods products. Different products and sizes of exporter are affected in different ways, with potentially different solutions, and therefore we sought specific examples wherever possible. The impact of delaying checks on products coming into the UK should also be considered.

On January 1 the UK ceased to be part of the EU customs area, and Great Britain ceased to be part of the EU single market for goods including food and drink, thereby becoming a third country. EU import conditions for third countries are extensive and complex, and as implemented through UK processes create an extensive manual for exporters. The UK has yet to introduce full import checks on food and drink from the EU for GB. Similarly there are grace periods in place for some movements to Northern Ireland. A Digital Assistance Scheme is being developed to support the continued movement of agri-food and live animals from Great Britain to Northern Ireland.

To qualify for zero tariffs on exports to the EU, food and drink products must meet rules of origin requirements. This could be a problem for some products, for example those using sugar or flour from outside the UK. It has also caused issues with distribution centres, as products cannot simply be imported into Great Britain and then re-exported to the EU.

SESSION WITNESSES

EMILY REES, Senior Fellow at ECIPE and Managing Director at Trade Strategies

KARIN GOODBURN, Director General of the Chilled Food Association (CFA)

NICK ALAN, Chief Executive Officer of the British Meat Processors Association (BMPA)

WILLIAM BAIN , Policy Advisor at the British Retail Consortium

ISSUES AND RECOMMENDATIONS

DIGITISATION & SIMPLIFICATION OF PROCESSES:

The cost of trade bureaucracy has approximately doubled to £1000 per vehicle processed, requiring border personnel to process paperwork. The Commission recommends the urgent digitisation and simplification of border administration for food trade.

• Digitise all export health certificates, paperwork and composite product documentation

• Redesign the system with just-in-time/short shelf life products in mind, as this is the primary form of food trade with the EU and NI

• Create a traceable and auditable ‘chain’, rather than paperwork at each step of SPS trade. This includes updating documentation to accommodate composite chain information, and modelling other SPS (meat, diary etc.) on the auditable ‘chain’ system.

STANDARDS & REGULATION:

Our exit from the EU should be an opportunity to raise food and agricultural standards. However, any divergence from EU standards will have a major impact on UK-EU trade and regulation within Northern Ireland.

• The Commission recommends enhancing the UK's regulatory approach to take account of divergence.

NEGOTIATIONS:

The NZ/Australia SPS agreements with the EU took around a decade to establish through the incremental building of trust. However, the political and diplomatic, not to mention economic, impact of frictional trade between GB and NI needs urgent action.

• Talks between NI, Europe, UK Government and businesses are vital as the NI protocol ‘roadmap’ unfolds. Consistently engaging communities and businesses will avoid investment instability and avoid political uncertainty in Northern Ireland

• Low-hanging fruit, sector/product specific agreements which could be agreed through an exchange of letters and would ease immediate problems should be prioritised, as a comprehensive veterinary equivalence agreement will take time to achieve.

KEY QUOTES

“We have heard how there is some low hanging fruit that could help reduce the burden on food businesses, including digitisation and certified and auditable supply chains. All of this needs to happen in a way that keeps businesses in Northern Ireland competitive and gives choice and affordability to households.” Aodhán Connolly, Director of the Northern Ireland Retail Consortium

“We’re dealing with archaic paperwork, Byzantine process and kafkaesque differences of interpretation.” KARIN GOODBURN, Director General of the Chilled Food Association (CFA)

“Veterinary agreements that can reduce the need for food checks don’t happen overnight” EMILY REES, Senior Fellow at ECIPE and Managing Director at Trade Strategies

“The cost of exporting food has gone up “considerably”, with most UK meat exporters facing “an extra £1000 to send a lorry through the port.” Adding “an army of office workers are needed to deal with additional bureaucracy and paperwork.” NICK ALAN, Chief Executive Officer of the British Meat Processors Association (BMPA)