Bad things come to those who wait. Four years after Brexit happened and five delays later, the UK will start inspecting food imports from the EU from April 30, and charging importers for the checks.
The delays have been for two reasons – the government didn’t get its act together fast enough, and it is rightly worried about negative fallout from the checks’ effects. But now it has been forced to act.
For four years the UK has been at serious risk of importing a major disease, like foot and mouth, which would devastate the farming industry. We are no longer part of the EU’s food safety system – it introduced its own checks four years ago – and are therefore now a go-to market for those selling rotten meat and fish.
Checks cost money and the government has just announced how much it is going to charge. Each product imported will cost up to £29, even if it is not selected for inspection. That means if you import one pack of cheese or one pack of bacon you will pay £29. Multiple loads of different products will be capped at five times £29, or £145. In reality that means that nearly everyone will pay £145 per load, even if that load contains just five different products.
The government says the fees will pay for “world-class border facilities”, but these are border facilities that were completely unnecessary while we were in the EU.
The consequences are obvious. Imports will fall as many continental firms, especially small ones, decide that sending their products to the UK is no longer worth the candle. Food prices at the deli, the foreign food specialist and even at the supermarket will rise as companies that stick it out try to pass their added costs on.
We know that imports will fall because that is what has happened to UK firms selling food in the EU. Small firms just gave up on the red tape and costs and stopped selling in the EU – for instance, meat exports from the UK to the EU have dropped by 17% since Brexit.
Bigger firms can spread the costs across huge lorryloads of a single product, but smaller businesses may have one mixed pallet of different foods on a lorry that also contains a dozen other pallets from a dozen other firms. The costs will be crippling – one £145 charge will quite likely wipe out any profit on the imports, and if just one pallet fails an inspection the whole load will be turned back.
Even the government admits this will cost businesses £330m a year. Yet that doesn’t count the cost of filling in the forms and writing the cheques, or the fact that firms will have to take on more staff just to push pens. Smaller firms just cannot afford to do that.
The latest figures from the Food and Drink Federation (FDF) found that British exports are down by 5.5%, year on year. That trend is just going to be replicated for British imports.
Foreign firms must now get vets’ certificates for every export to the UK, run new computer systems, fill in forms, send exact details of their loads to UK officials and pay for the privilege of doing all this.
Even if the system works – and that is a big if – it will doubtless mean more delays and time lost, a shorter shelf life and more food waste.
The UK imports 70% of its food from the continent in the winter months and 30% in summer. A thousand lorries a day will need to have the right paperwork, and many will still be pulled over for checks at new, massively expensive facilities.
As for food prices, this is just an own goal. It either hits profits or prices and most likely both.
Remember the £330m a year that the government calculates the red tape will cost is only a small part of the total price increases that will be passed on to shops, bars, restaurants, cafes, and food manufacturers. We are all going to pay more.
Last year the Centre for Economic Performance at the LSE found that Brexit was responsible for a third of all UK food price inflation since 2019. It discovered that regulatory border checks added almost £7bn to our grocery bills, and all that was before the British government got round to adding these new charges and tests. Things will now get even worse.
The FDF says that this “leaves businesses with less than a month to prepare for a crucial aspect of the new border model, which will have a knock-on impact on financial and procurement decisions.”
And that “It’s disappointing that there has been a shift in approach away from multiple items being included under a single declaration with one charge, to businesses being charged per item, which will significantly increase costs for companies bringing in mixed product loads, and disproportionately impacts SMEs.”
The common theme from trade bodies that cover the businesses affected is that this is a “hammer blow”, that the fees have been announced just a matter of weeks before they are due to be introduced and “seem to have been worked out on the back of a fag packet.”
The government has had eight years to organise this system, four more than it took the supposedly useless Eurocrats of the EU and still it is a mess. It says: “The charges follow extensive consultation with industry and a cap has been set specifically to help smaller businesses.” Which will doubtless come as a surprise to industry and especially smaller businesses.
These checks and charges have already been postponed five times. Most famously when Jacob Rees-Mogg delayed them in May 2022, because they would have been “an act of self-harm… it would have increased costs for people, and we are trying to reduce costs”.
Nothing has changed since then. They will still increase costs and cause delays. They are still an act of self-harm – like Brexit itself.
