James Withers, Scotland Food & Drink: “Brexit solutions are available”

In February you told the Scottish Affairs Committee that the biggest Brexit challenge the food and drink sector is facing is denial from the government of the scale of the problem. Is this still the case?
There has certainly been some more urgency to address issues. However, we are still concerned that UK Government hasn’t grasped the impact of the enormous, non-tariff barriers it has agreed to create with our most important export market. The huge challenges our exporters have faced since 1st January are still there. They are baked into a Brexit deal that feels like a no deal, just without the tariffs. 

Some issues have eased but a good day in the export business can be followed by two bad days. The world has become awfully unreliable and higher risk. Loads are susceptible to significant delays at multiple different points for multiple different reasons. Even if a load does successfully reach its destination in the EU, we are left with a system that is more costly, complex and significantly slower. For some businesses (e.g. craft drinks suppliers), the lack of any access to groupage – consolidated loads of different products - means the door to the EU is effectively closed. We have had meetings this week with our industry partners in Scotland and counterparts across the UK.

There is some momentum now building to explore a veterinary or SPS (sanitary and phytosanitary) deal with the EU, under the umbrella of the overall Brexit deal. This is now the single most important step that UK Government needs to explore. It is the only real mechanism we see to reduce the cost and complexity of new trade rules. That means we have to explore alignment with EU standards – which would simply reflect the reality of the position businesses are in anyway.

Has the £23m scheme for seafood exporters provided any relief for the sector?
While the scheme provided at least some welcome relief when it launched, it didn’t, despite its name, actually compensate for disruption. It would only compensate for losses, where there is evidence of sales not being completed with a customer due to a delay or if the product value was reduced.

The scheme, which is open to SMEs only, will pay a percentage of those losses. The percentage won’t be determined until all applications are received. In our view, it looks difficult to apply for given the evidence required to prove losses and the narrow eligibility criteria. There has been some expansion of the eligibility in light of industry concerns.  However, this scheme is by no means game-changer, the fundamental problems with the new export system are still there.

How do you envision the issues caused by Brexit being resolved for Scottish producers?
As we are often told, the first step to solving a problem is to recognise one exists. Whatever brought us to a hard Brexit has happened and can’t be changed.  However, we now have evidence of harm and impact. It’s crucial to open constructive dialogue with the EU to explore how we can deliver what they need from a third country, but in a streamlined, cheaper, faster, less complex system. 

It’s become clear that the EU third country import system was never designed for a country on its doorstep, integrated into its supply chains, sending large volumes of highly perishable product and smaller, consolidated volumes. In the end, the industry and consumer here want to maintain standards so let agree to align with our EU partners. Otherwise, the rug will be pulled from a significant chunk of the £1.2 billion of annual Scottish food exports for little, if any, benefit.

What long-term impacts could Brexit pose for Scottish food and drink if these challenges are not resolved?
As things stand, the UK has become a more unreliable trading partner. Crucially, if we can’t guarantee to get products to market at the right time, our EU customers will go elsewhere. They don’t want to, but there is a commercial reality at play here. There are jobs in some of the most fragile communities of Scotland reliant on this trade. The UK/EU deal has scope for simplification. That now need to be top of the agenda for UK ministers. Solutions are available and our food and drink exporters need them now.