May 30, 2024


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New post-Brexit border checks come into effect

New post-Brexit border checks come into effect

Image source, Getty Images

  • author, Michael Reese
  • Role, Business correspondent, BBC News

Meat, dairy products, plants and seeds are among the goods subject to physical inspection when imported into Britain from the European Union from Tuesday.

The second phase of border controls began from midnight and was introduced as part of the Brexit trade agreement.

But companies have warned that the trade controls, which will see import costs rise immediately, are expected to hit small businesses harder and result in higher prices being passed on to customers for some products.

The government said its new border model would “improve our biosecurity”, adding that the costs to companies would be “negligible compared to the impact of a large-scale outbreak of a plant or animal disease”, such as foot-and-mouth disease.

The UK officially left the EU four years ago, but it has taken some time for new trade rules – legally required under the Brexit agreement – for goods traveling from the bloc to the British Isles to be implemented.

Health certificates were introduced in January on EU goods ranging from fresh cut flowers to fresh produce including meat, fruit and vegetables, but on Tuesday, physical checks on goods came into force.

British exporters trading the other way have already faced increasing red tape for three years. Imposing such border controls in the UK would reverse the free flow of such goods, which had been allowed under the EU single market since 1993.

Products that pose a moderate biosecurity risk will also be screened, while low-risk goods, such as canned meat, will not require any screening.

The new controls have not yet been applied to goods from the Republic of Ireland, which is the main supplier of food to the UK.

The UK Government says inspections of Irish goods will not take place before November.

But businesses, especially small ones, have raised concerns that the new checks could disrupt supply chains and drive up costs, with importers having to pay £29 per shipment of certain products.

If multiple types of products are imported by one company, such as meat, fish and cheese, the company will have to pay £29 per category, up to a maximum of £145 per shipment. The government expected that these fees would cost British companies about 330 million pounds sterling annually.

John Davidson, co-owner of flower company Tom Brown Wholesale, said he expected the checks to cost his company between £200,000 and £225,000 a year.

“Normally we try to absorb as much as we can, but these kind of costs… [it’s] “It is not possible to accommodate everything,” he said.

Comment on the photo, John Davidson noted that prices will rise for customers at his flower company

He told BBC Breakfast that his “biggest concern” was how physical checks would be conducted in practice.

“These products have already been inspected in the Netherlands. From an industry point of view, communication was already missing.

While the checks take effect on Tuesday, it is understood that their number will be very low initially as traders get used to the new rules.

The government has acknowledged that red tape and additional checks will lead to higher food prices, but not to the extent we have seen recently. It expected that the controls would lead to inflation rising by 0.2 percentage points over three years.

But Lucy Neville-Rolfe, a minister in the Cabinet Office, said the new checks were needed to improve biosecurity in the UK.

“We cannot continue with temporary measures that leave the UK vulnerable to disease threats and could cause significant damage to our livelihoods, economy and agricultural industry,” she said.

Tom Bradshaw, president of the National Farmers' Union, said the union welcomed the checks “as a way to protect food safety in the country.”

“British farmers and growers need controls on all imports, not just those from the EU, to be effective, biosafe and effective. This looks different for individual sectors in agriculture, depending on the needs of the business.”

Britain imports 22% of beef, 21% of sheep meat, and 49% of pork, and relies on the European Union for the bulk of those imports, due to consumer demand exceeding supply, according to the British Meat Manufacturers Association.

The industry body said that with “little clear explanation” of how the new import checks would be implemented, it was “extremely difficult to measure the impact on meat supplies, even after four years in the making”.

Jamie Collins, of family-run food retailer Hamish Johnston in London, told the BBC that his company may have to raise prices slightly to maintain its margins.

He said: “We import a lot of cheese every week from France. Every import we bring in weekly is looking at an extra £220 added to the cost.”

Increases in food prices have been a major driver of rising overall living costs in the UK in recent years, with food price inflation – the rate at which goods become more expensive – rising by 4% in the year to March.

The pace of food price increases has slowed in recent months, but the cost of staples such as cheese, bread and milk is much higher than in 2020.

Martin McTague, president of the Federation of Small Businesses, said members were “still unsure” about trade controls.

“It's already been postponed five times, so there's no excuse for not letting small businesses know what's going on,” he said.

He said the “ripple effect” of increased costs would result in companies having to raise prices, reduce their offerings or “close shop entirely.”

Additional reporting by Darshini David, chief economic correspondent; Raphael Sheridan, Economics Producer, BBC News and Starr MacFarlane, BBC News Correspondent.