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Wednesday, February 21, 2024

The continuing cost of Brexit

The Guardian reports that Food businesses sending products to the EU have had to fork out an extra £170m in export costs because of Brexit red tape, with the changes described as being “catastrophic” for some exporters.

The paper says that in the three years since leaving the single market, exporters of foods of animal origin have had to pay the sums to secure sign-offs by vets before they can send their shipments: 

In the past 12 months alone, exporters have paid more than £58m. The extra costs have resulted in a sharp fall in exports, particularly among smaller producers, with the value of meat products sent to the EU down by 17% since 2019.

After the UK officially left the single market in January 2021, the EU made it a requirement for exporters of foods of animal origin to have vets check consignments and sign export health certificates (EHCs) before they could be sent. The UK brought in reciprocal measures last month, raising fears that some EU exporters might abandon exporting to the UK owing to the extra costs and bureaucracy.

Since December 2020, the month before the UK left the single market, more than 852,000 certificates have been requested by exporters, according to analysis by the Sanitary and Phytosanitary (SPS) Certification Working Group, which brings together trade bodies such as the Fresh Produce Consortium, Dairy UK and the Road Haulage Association.

These include certificates for fish and fish products, livestock, and meat and dairy products.

The group calculated that these certificates – which cost about £200 to complete – have heaped more than £170m in added costs for exporters over the past three years.

Peter Hardwick, the trade policy adviser at the British Meat Processors Association, said the extra costs had been “catastrophic” for some smaller companies.

The rules had hurt small businesses most because it was now much harder to send small mixed consignments to the EU, as they did pre-Brexit, because they would require multiple certificates, resulting in far higher exporting costs, he added.

BMPA also calculated that the food exporters, which generally operate on margins of about 2%, will have had to make £8.5bn extra sales just to absorb the costs.

Karin Goodburn, the director general of the Chilled Food Association, said the certificates were just one element of the costs businesses faced and the true figure would be far higher when new IT systems, administration costs and extra staff were factored in.

Goodburn, who is also the chair of the SPS group, said: “We’ve had companies employ extra staff to do the new bureaucracy, one of my members had to employ 30 new staff just to shift the paperwork.”

On top of this the paper tells us that the Office for National Statistics last week showed the amount of meat products exported to the EU from the UK in 2023 totalled £1.26bn, a 17% drop from the £1.53bn exported in 2019.

Although many of us were warning this would happen during the referendum campaign, for some reason the pro-Brexit campaign failed to put it on the side of their bus.

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