02 November 2022

FT's Thomas: The rotten state of Brexit for the food industry

You can imagine the wrinkling of the critic’s nose. The Brexit dish served up for the UK food industry is overcomplicated, unbalanced and in parts downright nasty.

Food has always been at the sharp end of the UK’s decision to leave the EU: a 24/7 supply chain that brings in from Europe about a third of overall food consumption and is highly vulnerable to portside delays, allied to a low-margin domestic sector that relies on immigrant workers and on exports, mainly to the EU, for its profitability.

Trade figures offer misguided comfort. Global exports grew strongly in the first half of this year, according to the Food and Drink Federation, exceeding pre-Covid levels for the first time. But the reality is headline figures mask a collapse in exporting by small businesses and restructuring by bigger companies to absorb the estimated 15 to 20 per cent higher costs of sending goods to continental Europe, said Shane Brennan from the Cold Chain Federation.

While first-half exports to the EU are still 5 per cent below their 2019 level, imports from Europe are up by nearly 22 per cent. That’s hardly surprising given that British exporters must bear the costs and hassle of health and safety checks and customs paperwork, while full border checks in the opposite direction were postponed again this year.

If anything, the aggravation of selling overseas is set to worsen. From December, my colleague Peter Foster reports, new UK regulations requiring formal, paper-based veterinary attestations for animal products for export could cripple sales into Europe. The UK has toughened rules that farm animals must be regularly inspected by qualified vets, requiring that each animal, meat product, offal or hide comes with a paper confirmation. This is impractical, as well as contrary to the promised crusade against red tape. Exports of meat, 70 per cent of which go to the EU, are likely to suffer given a lack of qualified vets to ensure compliance. Farmers, who rely on selling every part of an animal to eke out a profit, could be stuck with parts of a carcass for which there isn’t a domestic market, leading to pressure to put up prices on UK sales....

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