Yahoo Finance Brexit: British meat exports could fall 50% due to red tape, industry warns
Weaknesses in the current export system and “mountains” of red tape due to Brexit could lead to a potential permanent loss of trade of between 20% and 50% for British meat companies, an industry body has warned.
The British Meat Processors Association (BMPA) said in a new report that “dismissing trade disruption at the borders as simply short-term ‘teething problems’ is no longer credible.”
The report comes on the same day as the HMRC said it is offering advice about trading with Europe that will help businesses adapt to the changes to customs and tax rules, and avoid disruption when they move goods between the UK and Europe, or under the Northern Ireland Protocol.
The BMPA has said temporary teething problems have resulted from a mixture of simple mistakes made on both sides and differences in interpretation of the new rules.
As people get more familiar with the certification requirements, and EU and UK guidance becomes more closely aligned, it hopes these problems will sort themselves out.
However, it warned there is still urgent work that needs to be done by the government to align that guidance and added that systemic problems pose a bigger challenge.
It noted some are simply not fixable, like the 60% to 100% increase in certification costs for each export consignment, which is costing the meat industry an estimated £90m ($123m) to £120m a year.
It said exports were running at 50% of "pre-transition period" volumes during the first six weeks of 2021 and up to three days were being added to export times thanks to red tape, reducing shelf life and value of meat.
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Most companies now expect a permanent 20% loss of export trade, and some expect over 50% loss.
The report also said groupage, large truck loads of mixed items, which accounts for over 40% of the industry's EU trade has all but stopped and EU customers are cancelling orders because of longer delays and higher costs to import from the UK.
The report has made recommendations it believes can “drastically improve our ability to hold on to our trade with EU customers.”
These include moving from an antiquated paper-based system to a modern, integrated digital system as well as negotiating a more robust agreement with the EU to follow parallel rules which it said would ease problems sending food to both the EU and to Northern Ireland.
BMPA CEO, Nick Allen, said “the export hurdles we face are now in plain sight and are not going away. We need the government to urgently re-engage with both the industry and the EU to work out detailed and lasting solutions."
"The British Meat Processors Association and its members stand ready to consult with the government and map out those solutions," he added.
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Meanwhile HMRC said it is writing out to all UK based VAT-registered traders, as well as continuing to send weekly email updates to more than 170,000 customers.
Included in its suggestions to traders are that they should decide if they want to delay import declarations or duty payments on goods moving between the EU into Great Britain and appoint a specialist to deal with import and export declarations.
It said they should also find out whether they can claim the preferential rates of duty that were agreed in December’s cooperation and trade agreement between the UK and the EU.
Katherine Green and Sophie Dean, directors general, borders and trade at HMRC, said: "We know how challenging it is for businesses to adapt to so many changes, particularly during the COVID-19 pandemic. And we appreciate how much traders have done already."
"Customs and tax rules are complex, and we understand customers working through them for the first time need more support," she added.
On 1 January, Britain officially left the single market, meaning new customs checks and trading rules took effect.
Businesses have complained of huge disruption as a result of Brexit. Manufacturers union Make UK this month said three quarters of its members had experienced delays exporting since the turn of the year, while the Institute of Directors said on Thursday that 1 in 5 of its members had given up on trying to export to the EU.
Meanwhile, exports of fish and meat from the UK to the EU saw a dramatic dip in January compared with the previous year, compounding the chaos following the end of the Brexit transition period.
According to the Food and Drink Federation (FDF), among the hardest hit export foodstuffs were beef, which fell by 91.5%; salmon, which saw a 98% dip from the year earlier; and cheese which declined 85.1%.
The UK's export market suffered a fall of £750m — a total 75.5% decline from the previous January, the FDF said.
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