UK meat producers face up to £120m a year of extra long-term trading costs and the loss of at least a fifth of their total export trade because of post-Brexit requirements on shipments to the EU, the industry has warned.
“Systemic weaknesses in the current export system [and] mountains of red tape” led its members to expect a permanent loss of overseas trade, the British Meat Processors Association said.
While exports have been affected by “teething problems” such as mistakes in paperwork and varying interpretations of new rules in place since the UK left the EU single market at the end of December, there are also significant permanent new barriers to trade, it said.
These include higher certification costs and the lack of an electronic tracing and certification network, leaving the system dependent on heaps of printed paperwork.
“It is almost inconceivable that in 2021 one of the world’s most sophisticated just-in-time fresh food supply chains is effectively having to regress back to the 1970s,” the group said.
It said a survey of its members found that the industry expected £90m to £120m of additional trading costs each year, while most companies expected a permanent loss of at least 20 per cent of their total export business, with some placing that figure as high as 50 per cent. The EU accounts for most of UK meat sold overseas. Global exports reached £2.1bn in 2019, with imports of £6.6bn.
A transit delay of up to three days is cutting into the shelf life and value of exported meat, while there is a shortage of vets to process health certificates, said the BMPA. It is asking for a government-run vet checks service, an electronic certification system and a veterinary agreement with the EU, mirroring that of New Zealand or Switzerland, to reduce the impact of the new barriers to trade.
Nick Allen, chief executive, said such measures would require EU co-operation at a time of fractious post-Brexit relations. “The current climate is not conducive to sorting some of these things out,” he said.
The £8bn UK meat trade has evolved to send specific cuts of meat to the European countries where they are most in demand, said Allen.
He said meat export volumes to the EU had recovered to 70-80 per cent of pre-Brexit levels by volume, but that profits would be disproportionately affected by the new rules’ impact on profitable mixed consignments of packaged cuts of meat.
One large UK meat processor that previously made £10m-£11m a year in profits said it faced £3m of extra annual transport and certification costs, said Allen, while smaller processors were worse affected.
The government said a “unique” combination of Covid lockdowns across Europe and businesses adjusting to the new trading relationship, made it inevitable that exports to the EU would be lower at the start of this year than last.
The Department for Environment, Food and Rural Affairs said it was developing an electronic system to speed up documentation using existing systems for health certificates and imports of animal products.
The problems facing the meat industry emerged as the House of Lords EU Committee published a report into the EU-UK trade deal that warned it fell “far short of the ambition of frictionless trade”.
Food exporters have been hit hard by new red tape, the report found. It warned that while companies would get better at paperwork, the checks could become “a permanent barrier to trade in animal and plant products”.
The committee urged the government to work with the EU to reduce the burden on businesses, but accepted that the UK government’s decision not to align with EU rules on animal and plant products would limit the scope of any new deal.
The report highlighted problems faced by small businesses that lack the capacity to handle new paperwork caused by multiple VAT regimes and so-called “rules of origin” that determine whether products can get tariff-free access to the EU single market.
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