Written Evidence Submitted by the British Poultry Council – (TFA0002)
Why poultry meat is vital to UK trade
The British poultry meat industry is at the core of feeding the nation. A billion birds are reared every year, providing half the meat the country eats to world class standards in food safety and welfare. We do this as an unsubsidised sector that directly employs over 34,000 people. The industry contributes £2 billion GVA to the UK economy and generates £1.5 billion in tax revenue to the exchequer.
Unfortunately, this is all at risk should a level playing field with our trading partners not be met. Fair and reciprocal trade is vital to supporting healthy domestic food production and we are already seeing the effects that unequal trade and being unable to recoup rises in costs of production is having on the industry: DEFRA figures from May 2022 and May 2023, illustrate a 11.4% year-on-year drop in poultry meat production in the UK (measured as carcase weight). This is the most significant monthly decline in recent years. The current system is eroding British business viability, adding to soaring production costs and risks undercutting domestic production with imports, threatening to push up the price of food in the UK in the midst of a cost-of-living crisis. With international demand for poultry set to grow 16% in the next decade, the British poultry industry requires reciprocal trading opportunities to maintain competitiveness.
We trade with over 120 countries; our exports are worth £340 million and UK breeding stock – which 70% of poultry consumed around the world derives from – is worth £140 million.
With a staggering 20 million birds reared per week for meat in the UK, and consumer demand ranging from 30 to 35 million, trade plays a crucial role in ensuring continued access to poultry meat. Due to the high demand for white meat in the UK, it is necessary to maintain carcass balance by exporting significant volumes of dark meat, primarily to the EU. This meets consumer demand whilst minimising food waste.
Current trading issues are shaped by the Government’s lack of commitment to build sustainable trading partnerships that support UK standards, enhance UK competitiveness and back domestic producers.
About the BPC
The British Poultry Council is the trade association for producers of poultry meat from chickens, turkeys, ducks, and geese, addressing issues on all parts of the production chain: breeding, hatching, growing, and processing. Representing over 85% of UK producers, we are the voice of the British poultry meat sector.
BPC Response to UK Trade Policy: Food and Agriculture Inquiry
Agri-food strategy and oversight
1.1 In order for the UK’s poultry industry to continue to drive agri-food trade, the current trade strategy requires more joined up Government thinking and political will on addressing critical issues like creating a level playing field, and further engagement with industry to ensure that trade deals do not compromise domestic production.
1.2 DBT should make better use of Government resources and expertise by engaging with DEFRA’s Market Access Team who hold knowledge on the agri-food technical trade issues.
1.3 To continue trading in a challenging environment, businesses are looking to Government for certainty, not additional burden. To encourage the poultry industry’s ability to trade in a profitable manner, we require an operating environment that’s fit for purpose, with a commitment from Government to refrain from placing further cost burdens on our supply chain and ability to trade. From a trading strategy we would like to see:
1.4 In order for trade policy to be effective and coherent, Government departments must listen to the trading needs and considerations of agri-food industries and work collaboratively to achieve trade ambitions.
1.5 The BPC engages with Government trade policy at every opportunity. For example, we sit on the Trade Advisory Group led by DBT, and we are active in responding to calls for evidence and consultations about potential FTAs. The BPC participates in the Food and Drink Export Council, where it contributes to the Export Barriers working group. We also sit on the Poultry Export Certification Users Group.
2.1 Major trade barriers stem from a lack of Government commitment to developing resources to access key target markets for the poultry industry and support its trading capabilities. This has led to challenges, particularly with the EU as a third country trading partner, and increased administrative costs associated with export bureaucracy.
2.2 One possible explanation for the UK's approach to its agri-food industry is the perception that it holds less value and is considered a relatively small component of the country's GDP.
2.3 Other countries, like Denmark and the Netherlands, place a focus on their agri-food exports and provide funding and resources to enhance the trading capability of this sector.
2.4 This includes having agri-food present in foreign posts around the world, to provide resources on the ground to build relationships and lay the groundwork for healthy trade agreements.
2.5 The British Poultry Council has been engaging with the Government’s new agri-food and drink attachés and looks forward to continuing this work to make the most of trade opportunities and overcome existing barriers.
3.1 There is concern that the dissolution of the Department for International Trade and its correspondent select committee will result in less scrutiny of trade deals, and less Government resource to address existing and future trading barriers.
3.2 To ease this concern and manage potential negative effects, the Government should engage with domestic food producers early in the formulation of trade agreements to ensure that concerns and barriers can be adequately addressed.
3.3 The Government should work with the poultry industry to avoid a drop in domestic production, which will ultimately result in supermarkets looking to imports to fill their shelves and further undermine UK producers and the standards they operate to. The recent scenario of supermarkets importing Italian eggs serves as an example and has set a concerning precedent.
4. How could FTA scrutiny and consultation (such as through impact assessment, Parliamentary scrutiny, stakeholder consultation, and the Trade and Agriculture Commission) be improved?
4.1 We would encourage more robust scrutiny of FTAs, including impact assessments, stakeholder consultation and opportunities for Parliamentarians to examine trade plans. Consultation with the industries affected by any trade deals is crucially necessary.
4.2 To help address anticipated criticism, in any future trade deals, the UK should have mutually beneficial Sanitary and Phytosanitary (SPS) agreement and regionalisation for avian influenza agreed upfront. This will ensure that new administrative burdens and costs with export certifications are not introduced.
4.3 Levelling the playing field across industries, sectors and entire nations must take precedence should accessible and affordable food be the priority.
5.1. In terms of SPS criteria, the UK exports are treated as a collective entity and viewed as a single bloc. SPS agreements are not nation specific.
6.1 There has been no opportunity to maximise the benefits of leaving the EU whilst our competition continues to enjoy frictionless trade.
6.2 The challenges of exporting to and trading with the EU can serve as a case study for what happens when nonreciprocal agreements are put in place that undermine domestic food producers. What were once labelled ‘teething problems’ are now burdensome barriers to fair and reciprocal trade with our largest and most important partner, the EU.
6.3 Since 1 January 2021 BPC members have faced unreciprocated restrictions and additional costs and burdens to trade with their largest and most important partner. UK businesses spent £60 million on additional administration in 2021, and £50 million in 2022; EU exporters have spent £0. British Poultry Council members lost £85 million in chicken exports to the EU in 2021 with poultry exports decreasing in value by 69% first quarter of 2021.
6.4 UK import controls have been postponed four times, with Government citing cost and friction, despite seven years since the referendum and three years of the TCA to prepare. Whilst there is concern from EU food producers that they are not ready for UK import checks, they have been enjoying a competitive advantage. Exporters and importers want to avoid the stress additional checks pose to food supply, but the ongoing impact of unreciprocated checks is just as serious of a problem for accessible and affordable food.
6.5 The cost of not having fair, reciprocated checks is greater than the burdens that come with them – particularly in the absence of a veterinary SPS agreement under the Trade and Co-Operation Agreement, in which those burdens could be addressed. In short, it’s about seeking to minimise checks on trade through use of equivalent standards; reducing EU controls is just as viable a path as increasing our own.
6.6 By creating a level playing field, starting with a robust SPS agreement, and subsequently reducing costs and bureaucracy for both exporters and importers, the Government can provide crucial support to its food producers during this critical time where the future of UK poultry producers hangs in the balance.
6.7 Some of the new relationships that have been built post-Brexit, including Japan and Vietnam, have been in development over several years and are not a direct result of the UK leaving the EU.
6.8 The BPC is pleased to sit on the Government’s AI Vaccination Task Force, which is exploring the possibility of a viable AI vaccine for living with the disease in the long term. We are calling for Government to continue to work with the industry to explore the feasibility of a vaccine that is not cost prohibitive, does not impede on the industry’s capacity to trade or effect its crucial role in global food security.
6.9 There are various obstacles that must be addressed in order for an informed decision on AI vaccination to be made. This includes the viability of the vaccine, public perception to using the vaccine, overcoming existing trade barriers and the cost of surveillance and the vaccination itself.
6.10 There needs to be a global discussion and agreement on the use of vaccination for it to not prohibit the UK’s ability to trade. Considering poultry drives the UK’s agri-food trade and that 70% of poultry consumed globally comes from the UK breeding stock, there is a significant risk should global agreement not be met.
Free Trade Agreements
7.1 New trading relationships have not strongly affected the UK poultry industry. This is because the industry was not consulted prior to these agreements being made, and therefore the selected geographical areas are not significant poultry markets. In broad terms, these new relationships have not been in the best interests of UK poultry producers.
8.1 With the right agreements in place to safeguard the standards that UK food producers pride themselves on, CPTPP presents an opportunity for the industry to increase its access to these growing markets. The BPC welcomed the cap on the Tariff Rate Quota of 10,000 tonnes on chicken imports over a period of ten years. However, the poultry meat industry still requires the detail and Government commitment for expanding market access to individual countries within the bloc, including Mexico, as this is currently absent despite starting the process nearly 4 years ago.
8.2 The CPTPP can also serve as a testament to the repercussions of an imbalanced trading environment, which the industry continues to experience with the EU. Agreeing the logistics of trading with far away nations cannot deter from the need for a healthy and reciprocal trading relationship with the EU, nor can it compensate for the millions of pounds the industry has already lost. An analysis of the poultry meat import and export figures from 2022 clearly lays out this reality. Last year the UK exported around £227 million worth of poultry meat to the EU and imported more than £2.3 billion: a difference of about £2 billion. The value of poultry meat exports to the EU has been declining since 2020, whilst imports from the EU are rising.
8.3 This inequality mainly stems from a lack of a SPS Agreement with the EU. Without this agreement, UK businesses across the livestock sector are at a commercial disadvantage and face unreciprocated restrictions and additional costs.
9.1 The BPC is engaged with officials on the India and Canada trade agreements. The Gulf is more complex due to the strict halal requirements and is not of huge interest to BPC members.
9.2 As the BPC is not a core member of the Food and Drink Export Council, we rely on open consultations and other direct engagement methods to influence trade policy.
10.1 In addition to creating a level playing field with the EU, new FTAs should be focused on where the UK Government knows there are existing markets for agri-food and poultry meat exports, like China and South Africa.
10.2 We want to work with DBT to ensure future trade deals beyond the EU are in the best interests of UK food producers and focus on priority markets where we know there is a strong desire and significant market for UK poultry imports, like South Africa and China, the second largest global consumer of poultry meat.
10.3 To open and re-open these markets we need DBT to provide resources on the ground that will help us build healthy trading relationships. We also need a strategic approach to trading with China and South Africa as hindrances to developments stem more from political barriers than technical challenges. As officials are aware exporting poultry meat to South Africa is on the Government’s PB100 list of agri-food trade barriers as we haven’t been able to export to for several years due to unfair restrictions related to Avian Influenza (AI). The same goes for China.
10.4 The Chinese market is so important to our members that the industry self-financed a 2018 inward mission of Chinese officials to inspect UK AI controls, at the expense of about £50,000. The visit had a positive inspection report; however, it unfortunately did not lead to any changes as China’s AI ban remains in place.
10.5 Future trade deals can facilitate future investment by providing access to new markets and making it easier and less burdensome for the poultry industry to trade with our existing partners.
Standards and welfare
11.1 The Government’s current approach to trade leaves opportunity to undermine domestic food producers.
11.2 Food standards have not been a part of previous trade agreements, which leaves the UK market vulnerable to cheaper, and potentially less-quality food products. This holds particularly true for trade with the EU in the absence of an SPS agreement.
11.3 The Government needs to have a better understanding of the food that is being imported into the UK. However, this capacity relies on APHA and FSA resources, both of which are under immense pressures.
11.4 The Government has a responsibility to uphold the standards that UK producers adhere to, encompassing areas such as animal welfare, hygiene, environmental management, and food safety.
Impact on food supply
12.1 Healthy and mutually beneficial trade is key in supporting healthy domestic production and growth. Poultry producers want to continue to provide the UK with safe, nutritious, and low-impact food that represents the best of British quality. The current trading approach is eroding British business viability, adding to soaring production costs and risks undercutting domestic production with imports, threatening to push up the price of food in the UK in the midst of a cost-of-living crisis.
12.2 British businesses are at a commercial disadvantage due to the additional costs and burdens they face in trading with the EU, the poultry meat industry’s biggest and most significant trading partner. Please see question 6 for further evidence of this.
Support for businesses
13.1 There is an opportunity for the Government to provide further support through the DEFRA Market Access Team and through encouraging cross Government collaboration with DBT.
13.2 We hope that the import controls set to be introduced later this year will be a step-in levelling the trading playing field. A SPS agreement would further support this goal.
14.1 While the Government is making efforts to engage with the agri-food industry, there is room for further action. Specifically, we recommend the establishment of additional advisory groups and channels of communication tailored to the meat sector.
July 2023
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