16 minute read
Sandy Neil
Six months on
How the industry has learned to cope with Brexit
BY SANDY NEIL
Six months on from the end of the Brexit transition period on 1 January 2021 and all of the chaos it caused for UK seafood exports, have the problems been left behind? We asked seafood industry professionals in the UK and EU if exporters, logistics companies and border officials had sorted out the problems that led to many loads being delayed or even dumped. If not, what remains to be done?
Just two years ago in 2019, Scottish overseas salmon sales were worth a total of £618m, with France the largest market - responsible for sales worth £221m alone. The EU accounted for 56% of the volume, and 52% of the value of exports. Then came the Covid-19 pandemic, followed by Brexit, and everything changed.
On New Year’s Day 2021, the Brexit transition period ended, and a new customs regime began. Up until 11:59pm, when Britain remained effectively inside the EU’s single market, taking seafood to Berlin was as easy as taking it to Birmingham – the only difference was the distance.
Since the morning of 1 January, businesses exporting meat and seafood from the UK to the EU have faced higher costs, more paperwork, and delays that led to whole shipments being dumped, lost orders, discounted sales, and disgruntled customers. Exports almost entirely collapsed, when it was taking many hours – sometimes days – to process orders of seafood destined for the EU.
Figures released by the Office of National Statistics (ONS) revealed the devastating impact of Brexit, with UK seafood exports to the EU almost completely wiped out amid a £700m hit in January alone. According to the ONS, the fish and shellfish industries suffered a massive 83% drop that month.
It’s worth noting, however, that for the salm-
Right: Hamish Macdonell Opposite from top: Donna Fordyce; Tavish Scott; Artus Galiay
on industry volumes were up on January 2020 even though the total value of salmon exports to the EU was reduced, as Hamish Macdonell explains on page 28 of this issue.
In January 2020 the total value of food and drink exported to the EU from the UK was £1bn, according to data compiled by lobby group the according to data compiled by lobby group the Food and Drink Federa� on (FDF). In January Food and Drink Federa� on (FDF). In January 2021, this fell to just £256m.
Many other UK fresh food exports to the EU were also signifi cantly impacted by Brexit, with exports of beef down 91.5 per cent in January, pork down by 86.9 per cent, and cheese by 85.1 per cent. Salmon shipments declined 98% from the same period a year earlier.
The Sco� sh Salmon Producers Organisa� on (SSPO) calculated losses of at least £11m to Scotland’s salmon farmers in January as a direct salmon farmers in January as a direct result of Brexit. On top of that, the organisa� on es� mated that businesses are organisa� on es� mated that businesses are
spending £200,000 a month on the extra paperwork, amoun� ng to an spending £200,000 a month on the extra paperwork, amoun� ng to an annual bill of £2.5m.
At the heart of the costly delays is a complex layer of post-Brexit bureaucracy called Export Health Cer� fi cates (EHCs), which can run to dozens of pages for each order. These have for a long � me applied to animal-based imports from outside the single market and now, of course, apply to those from the UK.
In April, the SSPO’s Chief Execu� ve Tavish Sco� called for these documents to be urgently redrawn and simplifi ed to eliminate holdups. He welcomed a “commitment that the UK Government has given to ini� ate a system review of EHCs. They were never designed for perishable products like salmon, and therefore never should have been the document we are forced to use as exporters.”
By the end of May, “things are much be� er than they were, but are far from ideal,” according to the SSPO’s Director of Strategic Engagement Hamish Macdonell.
Exporters and importers are adap� ng to the many new changes, he says – for example, EHCs are now being processed in 45 minutes rather than four hours, shortening delays. While “there have been improvements since January,” Macdonell adds, “some extra burdens will remain, regardless of the eff orts being made.”
On the other side of the Channel in France, the issue of groupage – loading produce from more than one supplier onto the same truck – remains a problem, explains Artus Galiay, the Director of United Kingdom/ Ireland at Nord France Invest, the interna� onal investment promo� on agency for Hauts-de-France. agency for Hauts-de-France.
“On the French side, the import opera� ons are going quite well, “On the French side, the import opera� ons are going quite well, even though issues related to the groupage of consignments in even though issues related to the groupage of consignments in trucks remains problema� c,” he says. “Indeed, there are s� ll trucks remains problema� c,” he says. “Indeed, there are s� ll delays for the trucks that operate these groupages. The trend delays for the trucks that operate these groupages. The trend observed since the start of the year remains the same: to be observed since the start of the year remains the same: to be effi cient, importers are be� er off impor� ng full truck-loads, effi cient, importers are be� er off impor� ng full truck-loads, rather than smaller volumes. The larger the number of rather than smaller volumes. The larger the number of consignments in a truck, the higher the probability that consignments in a truck, the higher the probability that there will be a problem. there will be a problem. “What everyone used to do, i.e. order certain fi sh in small quan� � es on an ad hoc basis depending on availability, has quan� � es on an ad hoc basis depending on availability, has become much more complicated. Therefore, we have become much more complicated. Therefore, we have witnessed a gradual but steady professionalisa� on of importwitnessed a gradual but steady professionalisa� on of importers and exporters. This trend is developing and will con� nue to ers and exporters. This trend is developing and will con� nue to develop. It takes � me, but with habit, the ability to export andimdevelop. It takes � me, but with habit, the ability to export andimport improves, which helps in making cross-Channel trade more fl uid. port improves, which helps in making cross-Channel trade more fl uid.
“From the point of view of local fi sh control authori� es in Boulogne-sur-Mer, the quality of Bri� sh health cer� fi cates and pre-no� fi ca� ons in the online pla� orm TRACES NT has been constantly improving. This makes it possible to reduce the number of non-compliant documentary checks, thanks to the professionalisa� on of all the players: Bri� sh cer� fying vets, registered customs representa� ves, but also exporters and importers.”
“Progress has defi nitely been made in some areas,” agrees Seafood Scotland’s Chief Execu� ve, Donna Fordyce. “Groupage is working much be� er now, and border control inspec� ons are much smoother. There are s� ll some diff erences between countries in terms of required paperwork at � mes, but overall Sco� sh seafood is ge� ng through to its fi nal des� na� on.”
However, the extra paperwork is s� ll problema� c. “The focus now is on delivering fundamental changes to the system to reduce some of the administra� ve burdens placed on seafood exporters,” Fordyce says. “A new end-to-end digital solu� on has been fast-tracked for tes� ng in June and could be in use by the end of July. To its credit, the UK government has listened to the seafood industry in that regard. The proof will be in the pudding of course, but it’s good to see the government responding to this pressing concern.”
Extra costs “remain a major obstacle for small and medium sized companies wishing to con� nue trading into Europe post-Brexit,” she adds. “The Sco� sh seafood industry has begun reviewing where these costs could be reduced but this is unlikely to have a major impact given that some export charges – such as VET checks and cer� fi ca� on costs – can be the same whether you are expor� ng 10 kilos or 10,000 kilos. That is why there is a dispropor� onately adverse impact on smaller companies. The planned digital solu� on will reduce costs but not signifi cantly.”
The SSPO has echoed Seafood Scotland’s call for digi� sa� on of the paperwork.
Hamish Macdonell says: “We have pushed for ages for the EHC process to be digi� sed and, despite pilot projects being done before Brexit, it is s� ll some way off . That means that everything is s� ll done in hard copy (with pages and pages and pages) which leads to mistakes and then delays while new versions are sourced.
“In January, we experienced serious problems because of delays at the hubs processing the EHCs in Scotland. Thanks to the hard work of Food Standards Scotland (FSS), our member companies and the hauliers, those delays have been shortened greatly. EHCs are now being processed in about 45 minutes [they were taking up to four hours in January]. Some are taking longer than that, but everyone has had to adapt.”
These adapta� ons include se� ng off earlier, he explains. “Our member companies are factoring in the extra � me that is taken to process the EHCs into their harvest schedules, so fi sh is leaving the farms earlier and ge� ng to the hubs earlier, leaving more � me for the paperwork to be completed.
“FSS have also learned quickly over the last few weeks. Their EHC offi cials are now much more used to dealing with the paperwork and are quicker than they were. The shi� pa� erns have been altered to make sure the most staff are on duty when the weekly peaks happen and more staff are employed.
“We also had problems at the French border. Many of these were, again, because customs staff were not used to the new systems, the volume of product which needed to be processed, and the paperwork. Those problems have eased over � me as everyone involved (hauliers, suppliers and customs offi cials) has got more used to the systems.
“The result is that we are reasonably confi dent of providing day-one for day-two delivery to the EU, as we used to do before.”
What new challenges lie ahead for the UK’s seafood exporters?
“The new challenges are mostly to do with the extra demands of the paperwork,” says the SSPO’s Hamish Macdonell. “There is so much now
that mistakes get made and loads are delayed. Anything that causes problems and delays will play into the hands of our compe� tors.”
The main obstacle facing Bri� sh exporters, according to Donna Fordyce, will be recovering the customers they have lost.
“The challenge remains to win back overseas customers lost at the start of the pandemic,” she says. “Most have found other – non-UK – suppliers so it will take a concerted eff ort by everyone involved to persuade buyers that the Sco� sh industry can meet its previous commitment to deliver on day two, following processing on day one. But there’s no doubt that countries such as Norway have benefi ted from the impact of Brexit on UK seafood exports.”
Over in France “the issue of quotas remains a major challenge,” explains Artus Galiay of Nord France Invest. “If it takes � me to establish fi shing quotas, it causes delays all the way down the chain. French importers who work with local fl eets in Boulogne-sur-Mer are then aff ected. Similarly, the substan� al delays in the a� ribu� on of fi shing licences to French fi shermen is detrimental to the smooth func� oning of opera� ons in Boulogne-sur-Mer. This reduces inputs from local fi shing and aff ects the en� re French fi sh industry. There are therefore very strong expecta� ons in France for this issue to be resolved once and for all.
“In addi� on, the reopening of restaurants, a� er months of closure linked to the Covid-19 pandemic, will increase the pressure on the supply of fi sh and shellfi sh. It is in everyone’s interest to allow and promote fi sh exports. The full impact on consumer prices is likely to be felt over the next few weeks.”
Is there any progress in ge� ng around the EU ban on impor� ng live shellfi sh from all but the cleanest category of waters?
“Scotland’s waters are on the whole grade A waters, so the ban has had less of an impact for the Sco� sh seafood industry,” explains Donna Fordyce. “The Shellfi sh Associa� on of Great Britain is taking up the mantle with regard to the UK as a whole, and we support their eff orts in this regard, given the many family businesses who need this issue resolved urgently if they are to survive.” but that will not impact Norwegian imports.”
Few French companies are prepared for these new Bri� sh controls, says Nord France Invest’s Artus Galiay. “Local French companies know that one has to be well-trained in order to export from the European Union to the United Kingdom,” he says. “For example, formali� es are far from simple for so-called ‘triangular transac� ons’, whereby some products are bought from Bri� sh ships in Boulogne, before being re- exported to the United Kingdom. The return of Bri� sh controls will not help, and few companies are prepared for it yet. We will have to adapt, but ini� ally this will clearly risk sharply reducing French exports to the United Kingdom.
“The French and Bri� sh administra� ons are working together to clarify what is required of companies, who will then be able to see more precisely what they need to do. However, the local authori� es in France who will have to cer� fy fi sh products for exports to the United Kingdom are already familiar with this exercise, since they already cer� fy products exported to third countries such as Japan or Canada. Inspectors have already been hired and trained to prepare for the surplus of cer� fi cates that will be generated by exports to the United Kingdom.”
A� er all the disrup� on for Bri� sh seafood exporters, are the rival compensa� on schemes introduced by the UK and Sco� sh governments paying out?
“The UK’s original £23m scheme was less than helpful for the processing sector when fi rst launched because the criteria for approval was convoluted, resul� ng in very few processing companies being able to make successful bids for fi nancial support,” says Donna Fordyce. “Those companies which were successful also saw the claims capped and only 50% of the claim paid.
“The scheme was then extended to allow the UK fl eet to apply for funding, mirroring to a greater extent the Sco� sh Government scheme that had already been launched. Only one fund could be drawn down of course, so with both governments’ agreement, it was agreed that companies could compare awards from both sources before deciding which benefi ted them the most.”
Nearly all of the SSPO’s members were ineligible for compensa� on, according to Hamish Macdonell. He says: “The UK Government scheme was so � ghtly drawn - only small and medium-sized businesses could apply - that most of our members were not eligible. Only one member company of ours applied and that company was turned down. They are not sure why that happened so are chasing it up. As far as I am aware, the Sco� sh Government’s scheme was for caught fi sheries so, at the moment, none of our companies have accessed money from any of the schemes.”
Overall, six months on, it appears Brexit has made impor� ng and expor� ng seafood slower and costlier, explains Hamish Macdonell. “It is not as quick as it was,” he says. “There is considerably more paperwork. This takes more � me and resource and is cos� ng our members about £200,000 extra a month but they are coping.
“So, to sum up, our members are managing what is a more diffi cult process than it was before, and they are managing it as well as possible. Things are much be� er than they were but are far from ideal.” FF
Opposite: Salmon exports to the EU have suff ered delays and increased admin costs; below, DFDS is one of the main hauliers supplying the Sco� sh seafood trade Below: Boulogne-sur-Mer, a key seafood market for UK exports
What will happen when the UK Government introduces its own checks on animal-based products, with EHCs required from October, and in-person checks from January 2022?
“I suspect this move will have li� le impact because only 1% of imported products are set to be inspected in person,” Donna Fordyce says. “What is more of an issue is the poten� al buildup of products coming from Europe into the UK,
