The government will begin charging for carrying out checks on medium and high meat, dairy, and plant-based products, although according to the FT, the actual number of checks will initially be set at zero over fears that they will disrupt the food supply chain, and be phased in over an indefinite period.
This may avoid delays and disruption but EU exporters will still have to comply with our rules (and be prepared to prove it) with Export Health Certificates. So, the costs will still be a big issue, and how, as ITV has reported.
They claim these costs are nearly ten times the £330 million the UK government talked about last year. ITV asked how civil servants arrived at the figure but can’t get an answer. Instead, ITV News calculated it themselves using independent experts, which “suggests the cost of the new border controls will be a staggering £2.9 billion - almost ten times higher.” Our monthly food bills for this will rise by about £8 or £100 a year for the average household.
This may not be massive but during a cost of living crisis any increase isn't welcome and as usual, those on the lowest income will be most affected.
At the same time, Bloomberg has been looking in detail at the food supply chain for Danish bacon. Apparently, Denmark provides most of the pork imported into Britain. It’s a very large market for Danish producers and naturally the bigger ones are better prepared for Brexit.
One company alone, Danish Crown, exports 1,000 tons of bacon a week to the UK, and said it had been preparing for the checks for a long time. Lars Albertsen, the company’s UK managing director, told Bloomberg: “We’ve exported bacon to the UK for 130 years, it’s part of our DNA.”
Albertsen also predicted smaller exporters may “shy away” as Britain becomes more costly and bureaucratic to trade with, leaving consumers facing more expensive produce. “It’s a disaster for the UK,” he said.
There’s little sign of Danish firms pulling out of the UK market at the moment, according to Line Garboel, deputy head of international trade at the Danish Veterinary and Food Administration, which set up a taskforce and hired nine people to prepare exporters for Brexit. This is the difference between EU businesses and politicians and the UK. She hit the nail on the head with this comment:
“Right from the start, we took Brexit very seriously because we knew that it was an important market for our businesses to continue operating in.”
Ain't that true? We operated on a wing and a prayer with the level of charges only being published earlier this month and real fears that after eight years, three of those coming after the TCA was agreed, we still aren't confident the border control posts in Dover and Folkestone will be able to cope. We never took it seriously and believed for too long that we 'held all the cards.'
The EU managed all this on day one because (a) they were hard-headed enough to recognise the practical impact of Brexit very early on and (b) they don't rely on UK agriculture and food suppliers anything like as much as we rely on them.
Bloomberg report:
"Visiting every stage of the journey from Danish farm to UK market, a picture emerges of the reality of Britain’s decision to leave the EU – it’s not that trade stops, it’s just harder and that bit more expensive.
"The 19-hour route from Esbjerg to Immingham, northern England used by Danish Crown had operated customs-free within the EU for decades. 'Now we’re back to the mid-70s,' said Christian Pedersen, head of operations for the route at Danish shipping firm DFDS, referring to the new Brexit checks.
"DFDS hired five employees at Esbjerg to deal with border compliance. Mornings are spent on customs work for cargo arriving from the UK, from seafood and dairy products to textiles and waste used for energy. Spot checks by customs officials can include the use of dogs and X-ray scanners."
All of these extra checks and additional staff will have to be paid for one way or another and it is the end user, the supermarket consumer, will have to pay. It is the very reason the single market was created in the first place and why EU member states can't understand why we Brexited in the first place.
One of Danish Crown's UK customers is Todd Meats in London. The owner Robert Todd handles over £22 million of pork, chicken, lamb annually, selling to wholesalers and catering butchers.
He says he wasn't in favor of Brexit, and still isn't and you can understand why. He had to take classes and attend conferences to learn what would change and how to adapt his business.
He now mostly buys produce from EU exporters who also have distribution companies in the UK, and has largely shifted to a system where the the seller is responsible for any import duties and clearances rather than the buyer (Delivered Duty Paid). If the new checks impact the supply chain, he’s prepared to hold more stock in a temperature-controlled facility in Kent.
He thinks that companies won't absorb the extra costs and in some cases, products from smaller producers simply won't be available.
He sums it up with this:
“We’re now doing Brexit and we’ll get to see how it works out.”
We certainly will.
