Britain’s Brexit border is finally here. No one is happy

 

Britain’s Brexit border is finally here. No one is happy

 

Checks on EU exports to the U.K. have been repeatedly delayed — but the coming months will test firms who fear soaring costs and fresh disruption to supply chains.

 

JANUARY 26, 2024 6:34 PM CET

BY SOPHIE INGE, JON STONE AND KOEN VERHELST

https://www.politico.eu/article/britains-brexit-border-is-finally-here-no-one-is-happy/

 

LONDON — Four years after the U.K. formally left the EU, businesses are waking up to yet another Brexit hangover.

 

The British government is finally rolling out its post-Brexit border regime, which will see checks introduced on imports of EU plants, meat and other animal products for the first time since the U.K. left the bloc. 

 

The five-times-delayed Border Target Operating Model (BTOM) will be introduced in three phases, starting with paperwork requirements for EU businesses sending animal and plant products to the U.K. from Jan. 31. This will be followed by physical checks in April and safety and security declarations in October.

 

Yet, despite the long build-up, many EU firms appear ill-prepared for the changes — and there are concerns some will decide to give up on exports to the U.K. altogether due to added cost and new red tape.

 

“They will have to make a decision: do they invest in the systems, certificates and other compliance requirements with the inevitable cost, delay and uncertainty that brings?" asks Shane Brennan, communications director at the Global Cold Chain Alliance. "Some will, but only if they can pass that cost on to their U.K. customers."

 

“For others, the logical decision will be to scale back and stop selling to U.K. customers and choose to focus on some other buyers elsewhere in the single market.” This could then lead to an “erosion in the variety of choice” available in U.K. supermarkets, Brennan warned.

 

Marco Forgione, the director of the Institute of Export and International Trade, is picking up concerns on both sides of the English Channel.

 

“We’ve hosted a series of events with U.K. and EU businesses over the last few months and unfortunately what we’ve discovered is anxiety over these changes has actually increased and preparedness seems to have decreased by about 23 percent,” he said. According to a recent survey conducted by the institute, 54 percent of food and drink businesses feel “apprehensive” about the changes, with a further 21 percent even more so.

 

There is also confusion about how exactly the changes kicking in at the end of January will be enforced as physical checks are only introduced three months later.

 

“It’s a hugely insecure start,” said Brennan. “It could set a tone for the next three months that if you don’t complete the processes correctly, there are no consequences and you’ll be able to carry on your merry way.”

 

‘Deeply concerned’

In a letter to the U.K.'s Environment Secretary Steve Barclay, members of the Sanitary and Phytosanitary Working Group, which represents some 30 trade and professional organizations, say they are “deeply concerned” about the changes which they say will “curtail imports, increase food inflation and reduce GB food security.” The letter was shared with POLITICO.

 

In particular, they say they are worried about how the new system of checks will apply to mixed loads of goods entering Great Britain and known as “groupage.”

 

“This is not facilitated by the new BTOM, which only allows for multiple pick-ups of the same category of products to be on the same export health certificate,” the letter says.

 

This will “add significant cost to small volumes," they say, with cost increases passed on to retailers and consumers and fueling food inflation.

 

There are also jitters about a requirement to provide U.K. authorities with pre-notification of a shipment 24 hours before delivery from Jan. 31.

 

Tom Southall, executive director of the Cold Chain Federation — which represents businesses running temperature-controlled vehicles and storage facilities — explains: “This could result in vehicles having to wait on the EU side of the border until 24 hours has passed. With perishable goods such as dairy and meat products, delays can impact shelf-life and quality.”

 

This could be particularly damaging to groupage operations, he says, which “react quickly to demand and [for which] it is not often possible to plan loads in advance.”

 

Vets are meanwhile required to sign off the paperwork for the necessary certificates to transport meat products to the U.K. But Forgione noted “significant concerns – particularly in Germany and Poland – over the vet capacity to provide the export health certificates that are required.”

 

Cost questions

The British government puts the total cost of the new border regime at £330 million. However, it has yet to specify the costs the new system will impose on businesses. A new Common User Charge — set to be introduced at the end of April — is estimated at between £20 - £43 for each consignment but the government has not yet explicitly set the fee.

 

“If you’re a larger company importing very large amounts of produce this won’t have an enormous hit,” William Bain, head of trade policy at the British Chambers of Commerce said. “But if you’re a small business importing quite small consignments regularly then you’ll be disproportionately hit by this.

 

“Is it going to be a flat rate and will there be any allowances for the fact that smaller businesses face a disproportionately higher burden?”

 

EU officials and businesses have spent the last few months in discussions with their U.K. counterparts to try and understand the new system.

 

Danish dairy exporters face one issue they hope the U.K. can resolve before Jan. 31. Certain products they send to the U.K. will need a certificate if they're deemed to fall into a "medium" or "high-risk" category. But U.K. authorities haven’t yet decided which risk bracket some products should go in.

 

“I can’t tell you which products there are, but the U.K. is aware of the problem,” trade specialist Kenneth Lindhardt Madsen said. He works for the Danish Food & Agriculture Council, a representative group for the country’s agriculture and food export sector. “We’ve had a dialogue for a while and I’m confident it will be settled in time.”

 

Madsen says the repeated delays to the new system have at least allowed the Danes to prepare. “We prepped for this so many times that also the U.K. side was able to look at the many difficulties," he said.

 

One EU official, granted anonymity to speak candidly on the topic, said: "Obviously for it to work we need to be able to understand what is being done.

 

"I don't know if there is full clarity there as to how the various different parts of this thing will work."

 

The official said there were concerns it might be impossible "to fully adhere to everything on day one" which could "have a knock-on effect for agri-food supplies to the U.K."

 

One diplomat from an EU member country said business exporting to the U.K. had raised similar issues with their embassy in London. "We're not really happy with the information policy and timelines," they said.

 

A U.K. government spokesperson said: “We remain committed to delivering the most advanced border in the world. The Border Target Operating Model is key to this and introduces an innovative approach to importing that will be introduced progressively.

 

"We will use technology and data to make it simple for businesses to trade, while maintaining the flow and security of goods. The changes we're bringing in will help keep the U.K. safe, while protecting our food supply-chains and our agricultural sector from disease outbreaks that would cause significant economic harm.

 

"The BTOM, including the timeline for its implementation, was developed through extensive consultation with industry stakeholders. We have and will continue to work with industry, ports and airports to prepare for the changes being implemented."

 

For now, all businesses can do is prepare based on the information they have.

 

“Over the coming weeks and days, the Institute [of Export and International Trade] is undertaking a lot of activity communicating with businesses in the U.K. to encourage them to speak to their suppliers in the EU to make sure they are prepared and understand the processes and system,” Forgione said.

 

“We are also making sure that our advice and guidance and information is available in the EU and reaching out to EU-based businesses and the wider supply chain to ensure they, too, understand the changes that will be implemented.”