Brexit and the fine food sector

When a last-minute Brexit deal was finally agreed between the UK and the European Union just before the deadline on 31st December, the food and drink sector breathed a collective sigh of relief.

However, a few months down the line and independent retailers and SME producers are realising the real implications of that deal. “What was sold as a free-trade deal is nothing of the sort,” Darren Henaghan of Borough Market explained in a recent column for Speciality Food. “There may be no tariffs to pay, but trade – particularly in food, where the regulations are necessarily onerous – is far from free.”

Increased costs from new labels, certification and inspection rules are hampering both importers and exporters based in the UK, and the tight timescales that are so critical to meet in the food sector are being challenged. Scottish exporters of fish and seafood are fearing for their survival, while meat producers across the nation have warned that delivery delays caused by growing numbers of customs declarations could spell the end of trade with the EU in some cases.

“Investment and hope lost”

Even shipments to Ireland and Northern Ireland are facing prohibitively high costs. Paul Hargreaves, chief executive of Cotswold Fayre, explained in a letter to his MP, seen by Speciality Food, that because they are charged per line of an invoice, the cost of processing is “close to our gross profit”, making continued business in Ireland unviable.

Plus, food and drink products that are made in Europe but branded for the UK will now incur duties due to ‘rules of origin’ requirements. “We are not alone in facing an imminent loss of business due to Brexit, and the problem is exaggerated in the food and drink sector due to the low margin nature and relatively small shipments compared to other industries,” Paul explains.

Indeed, a number of Britain’s cheesemakers and mongers have revealed their own Brexit problems. Cheshire Cheese Co announced that it would stop sending its cheese to the EU due to an “oversight” in the Brexit trade deal which necessitates a vet’s approval for retail shipments containing fresh food. “Due to an oversight in the free trade deal, it is impossible for us to send cheese to our EU online customers,” the company says. “Defra has told us not to expect an exemption or change anytime soon. Investment and hope are lost today.”

Similar concerns led artisan cheesemaker The Ethical Dairy to cut supplies to Northern Ireland. Co-founder Wilma Finlay says the paperwork for sending fresh food to the EU, which was made for those moving large volumes of produce, was “simply not designed for businesses like us”.

She continues: “We are not unfamiliar with exporting. Ten years ago we exported ice cream from our sister company, Cream o’ Galloway, to South Korea and the export paperwork required to do this was similar. The difference is the scale.”

Paul McCafferty of the Northern Ireland-based Belfry Deli also spoke out after discovering the cost of an order of cheese from the UK mainland would rise by 50%, which was causing suppliers to pull out. He called the new paperwork and costs a “kick in the teeth for small business”.

The future of fine food imports and exports

Adrian Beale, sales and marketing director at importer and distributor Buckley and Beale, told Speciality Food that while some of the delays, holdups and mistakes caused as companies get used to the new paperwork will ease with time, the extra admin itself will be here to stay.

For that reason, he says it is important that businesses that intend to continue exporting and importing fine foods become familiar with the new rules as soon as possible. He also advises that businesses getting to grips with the new rules be patient. “Understand which parts you can control and which you can’t – and don’t fight against the parts you can’t. If anything, overcommunicate with your suppliers,” he says. “Don’t assume they’ll do the paperwork properly at their end, so check everything twice before ordering/sending.

“Don’t over-promise to your customers,” Adrian adds. “Everyone is aware of what’s going on regarding Brexit and Covid, so no one will be surprised if you say you can’t deliver in the way you used to – but tell them up front.

“That said, don’t simply give excuses. Be helpful and offer a solution – sorry we can’t do that, but in the meantime we can do this.”

This sentiment was echoed by Catherine Stephens, head of international trade services at Business West. “The best advice we can give to companies is to prepare as much as possible for the new rules and regulations and reach out for support when needed,” she told Speciality Food.

So are there still opportunities to be found in international trade for fine food businesses? James Monk, commercial director at Business West, says yes. “Exporting remains an important tool for business resilience and growth, and companies should remain confident that high-quality British produce remains in demand overseas.

“The Great British Food programme, for instance, allows firms to become part of a free online directory which is presented to global buyers. Companies can then gain exclusive access to meet the buyer events, market visits and other opportunity alerts,” James continues.

Simon Waring, managing director of Green Seed UK, an international sales and marketing consultancy, is also hopeful that systems will become streamlined over time. “Provided the costs of exporting do not make the whole exercise unprofitable, EU-based customers could still be important partners for the future.

“UK suppliers have spent decades building trust and a reputation for quality foods with European distributors and retailers,” Simon says. “Many of their products are not simply replaceable with others from other markets. Even more so when they have built well-regarded brands in the marketplace,” he continues. “Now’s not the time to give up.”

Brexit has challenged the importing and exporting landscape for fine food retailers and producers, and the easy accessibility that the UK once enjoyed with the continent has been replaced by strings of red tape and increased costs. But despite these challenges, the strong ties that Britain’s food sector holds with suppliers and retailers in Europe, together with the established quality of their own products and services abroad, will certainly see that Britain’s fine food industry endures