Brexit latest: Food sector at the centre of UK-EU dispute

The EU has announced that it’s beginning legal action against the UK over an alleged breach of the Northern Ireland Protocol. It comes after the UK unilaterally increased the grace periods for implementing post-Brexit checks on goods moving between Britain and Northern Ireland until 1st October.

While the EU has accused the UK of breaching international law, Britain has claimed the changes were “lawful”. According to Sky News, a government spokesperson said: “This is a normal process when implementing new treaties and not something that should warrant legal action.”

The food and drink sector has been at the centre of the debate around the NI protocol, with fears that the increased red tape could lead to delayed food shipments and empty supermarket shelves.

Ensuring food and drink “continues to flow”

The government has also delayed post-Brexit checks on certain EU goods entering the UK to give businesses more time to prepare for the new rules.

Food manufacturers welcomed the new timetable, which will come into effect on 1st January 2022. Ian Wright, chief executive of the FDF, said it was a “sensible and pragmatic step to ensure that food and drink continues to flow, and allows manufacturers access to the inputs and ingredients they need in order to continue producing the full range of products for UK shoppers and consumers”.

The move will also benefit fine food retailers and foodservice businesses that import ingredients from the EU. “Chefs rely on quality and fresh ingredients that trading with the EU allowed supermarkets and restaurants to get all year round,” Jose Ribeiro of We Love Pizza in Leamington Spa told Speciality Food. “With red tape and costs brought by Brexit, it is difficult to see how the cuisine which we have become accustomed to can continue to enter the supply chain without disruption.

“The UK leaving the European Union will not just change our trading relationships, it will change what we eat.”

Exports to the EU drop

The FDF also called on the government to use the extra time to do “everything it can” to support UK food and drink exporters who are struggling to move goods into the EU. “They must work constructively with the EU to address barriers to trade by improving the implementation of the trade agreement and streamlining processes.”

The latest figures from the Office for National Statistics show the biggest drop in the export of British goods to the EU on record. While exports fell 40.7% in January, imports were also down 28.8%. Exports of food and live animals to the EU, which includes seafood and fish, were down 63.6%.

“The poorer performance posted by the [food and drink] sector, vs general trade, is no great surprise when the sector has faced the challenges of the introduction of new rules regarding the export of food products including export health certificates,” says Mark Lynch, partner at corporate finance house Oghma Partners.

“It is sad that the vibrant and innovative UK food industry is being hampered by the manner in which the decision to leave the EU was executed. The January data shows that this is not just an issue to do with the UK fishing sector but it is a food-industry-wide problem.”

Mark said the decline should lessen later this year as companies get used to the new processes, but he currently estimates that 2021 will see a decline in UK food and drink exports of between £2bn and £4bn. “This equates to real sales, real profits and ultimately real jobs.”

“Outstanding issues”

Minette Batters, president of the NFU, said that as the food sector struggles with the additional costs and burdens that exporting goods to the EU now entails, it was “frustrating” that the government had not taken a similar approach to the treatment of imports from the EU.

“Our exporters face additional costs and run the risk of financial losses if products are turned back or held up at the border, yet [the new timetable for import checks] means that EU producers will maintain access to the UK market relatively burden-free for a considerable amount of time. It is crucial that we achieve a level playing field with pragmatic checks on imports and exports as quickly as possible,” said Minette.

She added that there remains “a lot of outstanding issues” that the NFU would like the UK and EU to resolve. “More needs to be done to address the burdens on exporters to the EU, including the digitalisation of outdated paperwork requirements for health and organic certificates, and streamlining physical and administrative checks at the border.

“We also need the continued ban on exports of UK seed potatoes to be urgently addressed. In the meantime, while the ban remains in place, our government must set out how it will support the British growers affected,” Minette said.

Three months into the new Brexit rules and many British food exporters and importers are still struggling to cope with the border processes. It is hoped that the latest extensions to the checks will allow businesses to adapt and the government to create viable solutions.