Border checks and labelling rules threaten EU fine food trade

Britain may have voted to leave the European Union nearly eight years ago in 2016, but many rules and requirements are only now being put into place after years of negotiations and delays – and they’re causing headaches for the food and drink industry.

On 30th April, physical border checks were introduced for ‘medium risk’ imports as part of the government’s Border Target Operating Model – its plan to gradually introduce full border controls on EU exports to the UK. The checks, which had already been pushed back five times from an initial start date of July 2021, follow extra paperwork rules that were introduced in January.

MPs have written to environment secretary Steve Barclay for clarity, however, after news emerged that the border checks would be initially set to a rate of zero for all imports – which they said was a further delay “in all but name”. Defra pushed back to reports the checks wouldn’t be running as planned in a statement, saying they were “taking a pragmatic approach to introducing our new border checks”.

The new rules require European businesses exporting certain plant and animal products, such as dairy products that contain raw milk, meat and meat products, to the UK to submit paperwork known as health certificates signed by vets, as well as being subject to physical checks.

But it is “unclear” how prepared businesses are for these changes, and there is still confusion and uncertainty about exactly how and when the borders checks and costs will be fully implemented, the British Chambers for Commerce (BCC) said. “With interest rates still high, inflation well above its 2% target and supply chain disruption continuing to build, these costs and uncertainty are the last thing firms need,” said head of trade policy William Bain.

How the border rules are impacting fine food shops

Speciality retailers have warned that Brits will lose access to artisan food from the Continent because of the cost of the border checks.

Panzer’s Delicatessen told Reuters news agency it has already lost 37 suppliers from the EU since 2021, and more could quit following the introduction of the physical checks and charges – leaving shops and consumers with less choice from smaller, often traditional, heritage producers.

“The government says there won’t be any disruption. I guarantee there will be,” said David Josephs of Panzer’s. “We already have some meat suppliers who are saying it’s becoming debatable as to whether or not it’s economically viable to supply the UK.”

In a post on social media, Panzer’s said post-Brexit paperwork is “confusing, arduous, costly and causes delays”. After shipping seamlessly from Milan twice a week for the past 10 years, now the deli must place orders 24-48 hours earlier, meaning fresh food “can lie around for an extra 24 hours before they are cleared”. New paperwork must be filled out and processed, and this results in increased costs.

“Where there was no cost before, the cost of goods has increased by 7-10%,” the retailer said. “Large supermarkets have the manpower and resources to tackle this pointless bureaucracy. Small businesses struggle.”

Simon Jones of Forest Deli admitted to Speciality Food, “I’ve never hidden my view that Brexit was always going to have a huge impact on trade with the EU, but even I didn’t think it would be as bad as it is becoming.” He said prices have slowly been increasing and the ability to get certain products has been harder. “Some products from Europe we have had to delist as supply dates and prices were so sporadic it was too much hassle,” he said.

The introduction of yet more checks and costs is “just another headache for the importers,” he said, adding, “they will have to pass the costs on to us, and we have no choice but to pass those increases on to our customers”.

Delays add more complications for fresh products like cheese and meat. “One of our suppliers of pate from Europe is importing far more product at a time, but less frequently, which helps them with costs, but has the knock on effect of meaning instead of always having a four-week best before date it now comes in sometimes with only a week. This increases the risk of waste, which is just another cost we don’t need,” Simon said.

With so many increases in risk, cost and also the look of products - with Simon noting added import labels sometimes cover the fronts of products, “which for premium products is really not enticing for a customer to pick up, and obviously can’t be used in a hamper as a gift” - this all spells bad news for small businesses.

Nick Carlucci of Italian food importer Tenuta Marmorelle agreed that costs would have to be passed on to fine food shops. Importing just one pallet of charcuterie would cost £432 more than before Brexit, he told Reuters. “We do our best to absorb as much as we can, but we have to pass it on to our customers, which are farm shops, food halls and delis.” For example, the cost of a 150g tray of Parma ham would rise by 4%, Reuters reported.

Mark Lynch, partner at corporate finance house to the consumer industries, Oghma Partners, suggested the rules were “taking Brexitism too far”. He said, “The government has insisted on introducing border checks for what, pre-Brexit, was considered OK to import without checks. The evidence suggests that these checks will be introduced in a half-hearted manner, will reduce choice and increase costs.”

As part of the border rules, the government also confirmed a new ‘common user charge’ for importers of up to £145 for ‘mixed consignments’ that arrive in the Port of Dover or Eurotunnel. 

Nigel Jenney, CEO of the Fresh Produce Consortium, called the charge a “thinly veiled tax on the industry” that is “particularly devastating” for small businesses. Experts predict it will add £200m in costs across the fresh produce supply chain. “These exorbitant charges imposed by our own government represent a direct tax on businesses. It’s a move that will undoubtedly shatter supply chain confidence and is already encouraging EU exporters to reconsider their commitment to supply the UK market,” he said.

The BCC’s William Bain agreed that the new flat fee is a “hammer blow” for small importers and “deeply concerning” for retailers, cafes and restaurants. 

“Importing a small consignment of goods with only five different meat, poultry, egg, milk or some fish products in the ‘medium risk’ category will now face a bill of £145 per package under these proposals. 

“The government should immediately exclude firms in the trusted trader scheme from these charges, which would give many smaller businesses some relief. But in the long-term, these checks and costs should be done away with by reaching an agri-food deal with the EU, something we have consistently called for.” he said.

Taken together, these changes will result in fewer European products being available in the UK, Panzer’s said, with retailers having to break long-term relationships that have taken years to build. “Small, passionate businesses who are unwavering in creating high-quality products will be the ones to suffer on both sides of the Channel,” the deli said. 

And consumers lose out, too. “As a result, we’re facing a culinary cultural loss, where we no longer have the same wonderful and diverse taste experiences.”

‘Not for EU’ labels

Another issue causing concern in the industry are requirements to label meat and dairy products sold in the UK as ‘Not for EU’. The label is designed to stop products sold in Northern Ireland from ending up in the EU, ie the Republic of Ireland, as part of the Windsor Framework. 

However, the Food and Drink Federation (FDF) estimates the extra labelling requirements will cost between £150m-£200m. What’s more, consumers have been left confused about what the label means, questioning whether the British products are of a lower standard than required by the EU.

While the labels were introduced in Northern Ireland on meat and some dairy products in 2023, they will continue to be rolled out in the rest of the UK in 2024, and in 2025, there are plans to add the labels on fruit, vegetables and fish, too.

The FDF warned the labels will “almost certainly result in growth being reversed in our largest export market [Ireland].” Over 2023, Ireland became Britain’s first export market to reach £4bn, up 6.4% from the previous year.

Balwinder Dhoot, director of industrial growth and sustainability at the FDF, said the introduction of ‘Not for EU’ labels across the whole of Britain will “undermine” trade with EU markets. “It’s baffling why the government would want to implement something so damaging, that will reduce investment, push up prices for shoppers, whilst delivering a real blow to our exports just at the time when our businesses need more support,” he said.

Following a consultation by the government that closed in March, the NFU also said it was “concerned” the approach could lead to consumer confusion and additional costs for domestic suppliers, potentially leading to barriers to trade with the EU, particularly the Republic of Ireland.

The British Meat Processors Association (BMPA), meanwhile, said the labels had “damaging and at times ridiculous consequences”.

“Apart from the significant and unnecessary cost, all of this will lead to a two-tier market in GB with consumers wondering why some goods have the ‘not-for EU’ label and some do not. They may presume that the former are produced to a lower standard; a ‘not good enough for EU label’,” said Peter Hardwick, trade policy adviser for the BMPA. What’s more, he said, with imports also required to bear the label, “this may well prove a disincentive to place goods on the GB market”.

“Labels serve the purpose of providing information to consumers, for traceability and promoting the quality and features of a product. This requirement does none of these things,” he said.

The FDF’s Balwinder proposed digital solutions and said the group is “urging the government to remain open to these rather than imposing their own, rather analogue and backward-looking proposals.”