Due to Brexit regulations, food companies exporting to the EU have had to pay an additional £170m in expenses, causing significant harm to certain exporters.
According to data reported by the Guardian, exporters of animal-based food products have been required to pay fees for veterinarian approvals in order to ship their goods since leaving the single market three years ago.
During the last year, exporters have paid over £58 million, leading to a significant decrease in exports. This has had a greater impact on smaller producers, with a 17% decline in the value of meat products being sent to the EU since 2019.
Following the UK’s departure from the single market in January 2021, the EU mandated that exporters of animal-based food products must have their shipments inspected by veterinarians and obtain export health certificates (EHCs) before they can be shipped. In response, the UK implemented similar requirements last month, causing concern that some EU exporters may choose to stop exporting to the UK due to the added expenses and administrative burden.
In the month prior to the UK’s departure from the single market, which was December 2020, the Sanitary and Phytosanitary Certification Working Group, comprised of trade organizations such as the Fresh Produce Consortium, Dairy UK, and the Road Haulage Association, conducted an analysis and found that over 852,000 certificates were requested by exporters.
Certificates are available for fish and fish products, livestock, and meat and dairy products.
The team estimated that the completion of these certificates, which have a cost of approximately £200, has resulted in an extra expense of over £170m for exporters in the last three years.
According to Peter Hardwick, a trade policy advisor for the British Meat Processors Association, the additional expenses have had a devastating impact on smaller businesses.
According to the speaker, the regulations have had a significant negative impact on small businesses. Before Brexit, it was easier for them to send small mixed shipments to the EU. However, now they must obtain multiple certificates, which has greatly increased their exporting expenses.
According to BMPA’s calculations, food exporters, who typically have a profit margin of 2%, would need to generate an additional £8.5 billion in sales in order to cover the expenses.
Karin Goodburn, the head of the Chilled Food Association, stated that the certificates were only a small part of the expenses that businesses had to deal with. She added that the actual amount would be significantly greater once additional costs for new technology, administrative tasks, and additional employees were taken into account.
Goodburn, the chairperson of the SPS group, stated that some companies have hired additional employees to handle the new administrative tasks. One of the members had to hire 30 new staff members specifically for this purpose.
The additional expenses amount was reported by the Office for National Statistics in the past week, revealing a 17% decrease in the export of meat products from the UK to the EU in 2023, totaling £1.26bn compared to £1.53bn in 2019.
This was the second-lowest figure in the past decade, with the lowest coming in 2021, the year after the rules came in, where £1.13bn of meat products was exported. That year’s figure would have also been affected by Covid-19 restrictions.
According to Hardwick, larger corporations are forced to absorb these additional expenses, resulting in lower profits or potentially higher prices for consumers.
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He stated: “For certain smaller businesses, this has been a fatal situation. By ‘fatal,’ I mean that they have not necessarily closed down, but it is no longer profitable for them to export.”
In the previous month, the United Kingdom implemented updated regulations for export health certificates, which apply to European Union businesses exporting animal-derived products into the UK. These changes are part of the Border Target Operating Model.
According to the Guild of Fine Food, an organization representing 12,000 independent food businesses, small European suppliers of cheese and meat may choose to stop exporting their products to the UK.
The change was well-received by British farmers as it allows them to have an edge over international producers in the local market.
If the Labour party gains control, it plans to negotiate a veterinary deal with the EU that would eliminate certain expenses. However, this process could be lengthy and would require the UK to adhere to EU standards for these products.
Goodburn stated that the UK had been at the forefront of implementing food safety laws in Europe for the 30 years that it was a part of the EU single market.
“We played a role in developing the laws and took the lead on implementing the hygiene law. As a result, it has been confirmed through the agreement that we are in compliance with it.”
The relevant authorities at the Department for Environment, Food and Rural Affairs have been notified.
Source: theguardian.com
