The British Poultry Council makes renewed call for veterinary agreement with EU
For the past two years now, British poultry businesses that trade with the EU have faced a double standard. While goods entering the EU have faced punitive sanitary and phytosanitary (SPS) checks at the border, with some consignments being rejected for minor errors in paperwork, imports from the EU have been waved through to the UK.
The costs are significant. Last month, the annual accounts of Avara Foods revealed the company’s ongoing additional admin and logistics costs relating to Brexit are now £2.5 million a year. The firm produces around 20% of the UK’s chicken.
For the food industry overall, the figures are staggering. Data from the Animal and Plant Health Agency show that the bill for Export Health Certificates (EHCs) to ship all products of animal origin to the EU came to £60 million last year. “That reflects a 1,255% increase year-on-year,” the British Meat Processors Association said.
“But that’s just the start,” said Nick Allen, chief executive of the BMPA. “The EHCs will just get goods on to a lorry. In addition, there are now numerous new costs and overheads that previously didn’t exist. These include extra administrative staff, additional paperwork, record keeping and systems to support the issuing of EHCs, port charges, customs agents’ fees. The list goes on. Costs vary between companies, but all have reported a significant increase. Those same companies are also reporting a persistent loss of trade with the EU around 20%.”
What a mess
Graeme Dear, chairman of the British Poultry Council (BPC), told the Northern Broiler Conference, held last month as a virtual event, that the whole situation was ‘a mess’.
“Of course, we expected a settling in period, but when two years down the road we still haven’t implemented EU import rules, it can’t be described as anything but a mess.
“Challenges have been far larger than so called teething problems,” he said. “Our industry has had its fair share of rejected consignments, due to wrong stamps, and the bureaucracy of operating with third country status. New ways of managing this must be found.”
He said the fact British poultrymeat producers had faced all the additional checks, while their European counterparts faced no such barriers bringing their products into the UK, was very unfair.
The solution – all industry bodies agree – is clear. A “mutually beneficial SPS Agreement” between the UK and EU that would minimise the need to any checks in either direction. It would also help with the chronic shortage of vets that is additionally hampering the processing of poultry exports.
So far, the Government has rejected such a solution, fearing it would compromise the UK’s ability to strike trade deals with other countries. But the BPC, BMPA and others are clear the status quo is untenable.
“The situation might not be as dire as early this year, but it is costly and it is resource intensive,” said Dear. “This year, resilience has to be built into the system in the form of a mutual veterinary agreement with the EU. Until that is agreed upon, we can expect teething problems to increase biting into the viability of exporting poultrymeat. If trade is going to work, it has to be fair and balanced.”
Inflation bomb
Nick Allen agreed. He also highlighted an additional problem. When the new checks for EU imports comes into effect in July, it is likely to exacerbate inflation throughout the supply chain.
European exporters currently supply over a quarter of the food on British shelves. From July, the same extra time and cost burdens to get through customs will be imposed on EU suppliers. “This means that EU imports will suddenly become more expensive, and European exporters will become less inclined to keep supplying to the UK,” Allen said.
“When you consider that over a quarter of all food on British shelves is sourced from the EU, these new costs imposed by Brexit will only add to the UK’s cost of living woes. The new post-Brexit trading regime has added millions in extra cost but provided zero benefit to companies; and it’s consumers that will be picking up the bill.”
Allan agreed an SPS arrangement with the EU could help prevent this additional inflation adding to consumers’ and businesses’ bills.
“The Government could solve this problem by entering into a Veterinary Agreement with the EU which would instantly negate the need for most of the current bureaucracy and physical border checks and give British exporters a fighting chance to regain the trade they’ve lost – trade that simply can’t be replaced by selling goods to more distant markets”.
Richard Griffiths, chief executive of the BPC, said the Trade and Co-operation Agreement (TCA) negotiated with the EU had so far lead to significant barriers to trade. Despite Britain’s food producers continuing to try to mitigate barriers and minimise extra cost, systemic challenges are not getting any easier and are not suitable for the just-in-time nature of our supply chains, he said.
“Government have continually expressed that the TCA allows British businesses to ‘trade freely’ with the EU, but this is not reflective in the real-world impact of third country trading,” he said. “From vet shortages, to mile-long-queues to Dover to trading under bird flu, it is clear the current system is not designed for third countries to trade freely with the EU.
“Businesses have tried to face into these burdens but trade with the EU is imbalanced. To thrive, not just survive, recognition of mutually beneficial standards and practices with our most vital trading partner must be agreed upon to ensure fair and competitive trade and to correct the problems our member businesses are encountering on a daily basis.”
Barriers to trade
Two years of adjusting to the conditions of third country trading has taught us which parts of the system must evolve to keep food moving with our most vital trading partner, he said. “Britain’s poultry meat producers require a working SPS Agreement that takes ownership of British standards and finds solutions to current burdens preventing fair and competitive trade with the EU.”
This should include a consistent, mutual approach to certification checks to maintain fair and competitive trade, and flexible border arrangements in light of a shortage of Official Veterinarians (OVs) to ensure minimal disruption to just-in-time supply chains.
“We have an opportunity to do what is best for our trade systems, yet our Government is continually putting barriers in our way. The first part of the solution to these structural issues, and the next phase of functional trade with the EU, is a mutually beneficial SPS Agreement that makes trade under Brexit work for Britain’s food producers. We need to invest in solutions now to avoid further jeopardy to British businesses come July.”