Written Evidence submitted by The International Meat Trade Association (SME0003)
1. The International Meat Trade Association represents predominantly UK based importers and exporters of beef, lamb, pork and poultrymeat. We also represent associate members who are closely linked to the meat trade including freight forwarders, customs agents, cold storage providers and shipping lines. Given our members are importers and exporters of meat we wanted to make a submission to the call for evidence.
Which seafood and meat exports have been particularly affected by border delays and disruptions since 1 January, and why?
- There has been a general impact on meat exports to the EU following the introduction of export certification, pre-notification, veterinary check requirements. This has affected all meat exports. These requirements add costs and delays and will have an impact on being able to supply contracts competitively into the EU.
- There is an added impact on shorter shelf-life products.
- There has been a particular impact on groupage loads used by SMEs. This is where a company may have a couple of pallets on one truck and other companies also have goods in the load.
What impact have delays and non-tariff barriers on seafood and meat exports to the EU had on UK businesses? What are the medium to long-term implications of the non-tariff barriers for UK exporters and supply chains?
Added costs and delays
- The immediate impact on meat exports to the EU has been added costs and time lags added to supply chains which render our exports less competitive and in need of urgent solutions. Added costs derive from needing vets to sign export health certificates, use of agents in the EU to pre-notify TRACES NT, cost of veterinary checks at the BCP and customs formalities. This is compounded by availability of those able to carry out these tasks.
Rules of Origin
- There has been significant confusion around the rules of origin that were agreed in the deal reached on Christmas eve without good time for companies to decipher the rules and what they mean for their particular supply chains. Defra and HMRC officials have been working round the clock to answer reams of questions on rules of origin for particular supply chains and we have to commend them for all their work on this. However, purely owing to the timeframe it is not possible to provide the clarity businesses need to the level of granularity necessary.
- One health certificate covers one consignment so this means in a groupage load (where there are multiple consignments potentially belonging to multiple owners in one load) there may be multiple certificates required and the risk of being delayed due to checks increases upon entry to the EU. The complexity of needing EHCs and facing veterinary checks is multiplied in a groupage load.
- In the Conservative Manifesto there was a commitment that ‘we will help SMEs to become exporters, so that they can seize the opportunities that will become available once we get Brexit done’ and that ‘we will ensure that regulation is sensible and proportionate, and that we always consider the needs of small businesses when devising new rules’. The new requirements are a challenge to all companies but particularly SMEs who have fewer staff to take on the additional administrative burden.
What steps should the UK Government take to mitigate these issues? What should its short and long-term priorities for action be?
- Though these formalities are a reality of being outside the single market and customs union the UK government needs to aim to improve the agreement reached and should seek a veterinary equivalence agreement with the EU. This would see a reduction in the level of physical checks for our exports entering the EU and simplified certs, though it would not diminish the rates of documentary or seal checks required. This was one of the points we included on a checklist of actions for the UK government in our Brexit policy paper published in 2016. We would be keen to understand how the specialised committees which are established under the TCA will be used to seek cooperation between the UK and EU on SPS issues.
- Compensation that has been offered to the fish sector should also be a possibility for those in the meat sector who have faced rejected consignments and lost product as a result. Any support to meat industry should be available also to meat traders and not just to slaughterhouses as they play an important, but perhaps less widely understood role in the meat trade. See link to role of a meat trader briefing.
SME Specific Plan
- A specific plan is needed urgently to support SMEs in this new trading environment where they are faced with significantly increased complexity in exporting. This includes finding solutions to allow groupage to work for exports and imports for SMEs. We welcome the announcements on grants for SMEs but support to this sub-set of businesses must go further.
Export certification – APHA resourcing
- There should be close monitoring that APHA who issue export health certificates have enough resource to face the workload they have with avian influenza, all the new certificates for export to the EU (and queries that come with that) and for their business as usual issuing of certificates for exports to rest of world. Does APHA have sufficient resources for the certification needs of the industry?
- The UK government needs to continue to monitor the capacity of the UK veterinary market and ensure this is sufficient to meet the needs of our exporters but also the veterinary checks that will come in for EU imports to GB from April and July onwards. What is the governments’ assessment of whether there is sufficient resource for the veterinary checks for imports?
Electronic certification and TRACES NT
- Electronic submission of UK certificates into EU TRACES NT system and EU member state systems.
Prohibited and restricted products
- There are various products where there is no export health certificate for export to the EU, this includes for chilled mince meat, chilled meat preparations and for MSM. Urgent action needs to be taken to allow for British companies to export these to the EU.
Opening other markets
- We have been highlighting the need to open new export markets for British meat and more work is needed to get markets open. The Conservative Manifesto said ‘we will seek to gain market access for British businesses and lower the cost of trade for them’. More action is needed in this area and now even more urgently given the added complexity that now exists for trading into the EU. What more can the government do to deliver the opening of markets for our sector?
Rules of origin
- More needs to be done to help businesses of all sizes to understand the rules of origin that came in under the EU-UK TCA as of 1st of January without the time to understand the changes.
How useful and responsive were the guidance and support provided by the Government to business, before and since 1 January?
- The work of officials in the run up to 1st of January must be commended as officials went out of their way to support trade association briefing sessions and seek answers and solutions to issues that the industry foresaw in leaving the EU.
- The challenge was always that whether deal or not there was going to be a seismic change in the business environment and the level of granular detail companies needed in order to adapt to this was not provided for nor the time to do so.
- In our sector our members need to understand customs (declarations, duty, origin) and veterinary (certification, checks) aspects and though there was collaboration between HMRC and Defra on delivering webinars on export to the EU the guidance on specific issues including transit does not help companies to navigate both the customs and veterinary aspects of an issue. Companies do not think of things in silos and need all angles to make the relevant changes.
- Not only are companies grappling with the new requirements but also the contractual implications of these new steps in the chain. Many companies will have had to re-evaluate the ‘Incoterms’ under which they have been trading whilst in the single market and customs union in order to define who in their supply chains is responsible for the customs declaration, the vet certificate, the vet checks etc. These are commercial considerations but there was not necessarily an understanding of what one aspect or detail which was perhaps only agreed or notified by government late on can have on the commercial operating of supply chains and companies.
- Webinars and materials available were not detailed enough. Guidance also didn’t often consider non-linear trade options for example where something has been imported into Great Britain and processed and re-exported to the EU.
- There was extreme difficulty due to the deal being reached so late and companies then having to decipher rules of origin. There has been information overload and companies also having to make changes on the back of it.
- A further challenge we foresee is the volume and format of all the UK legislation and how companies tackle digesting that.
- Some of the solutions and easements provided around trading in the new Brexit environment focussed on solutions that worked for retailers but did not necessarily address the needs of other parts of the food industry. The food industry is vast and diverse and all aspects of it need supporting to ensure a continued vibrant industry in the future that enables UK consumers to benefit from a wide offering. This is true of support relating to the impacts of COVID 19 as to trade related matters.
What can the UK learn from other countries who export food to the EU?
- The UK will need to monitor closely changes to EU regulations via Eur-lex and via WTO notifications to ensure that changes to EU legislation are understood for British exporters to the EU and that there can be enough warning of these changes to industry.
- Veterinary equivalence like that agreed between NZ and the EU which reduces the rate of physical checks on product.
How ready is the UK to introduce checks on food imports from the EU during 2021, and are there lessons to be learnt from the issues that UK exporters have faced?
- The UK government needs to ensure that there is sufficient detail available on its import from EU policy. There is still much of the necessary detail missing. For example, we still do not have the detail needed on how the documentary checks from April will actually work. We do not know the pre-notification time required for IPAFFS. These details are crucial for supply chains to understand as they have an impact on when they arrange for vets to sign certificates, when they load and what they can advise their customer in terms of delivery times.
- The details laid out in the Border Operating Model are very high level and do not contain the necessary detail for businesses to make the requisite changes to their supply chains. We are already very late in getting this detail to allow whole supply chains to understand the requirement and make changes.
- Webinars need to go into specifics about how to complete documents not just tell companies to get a vet. The whole process needs to be transparent and available to be understood by customers, suppliers, agents, vets who all work together to ensure that trade can happen. If you only have sight of your bit in that new process you cannot understand fully the impacts on the next part of the chain and this is evidenced by what we have seen with our exports to the EU. For traders understanding how a vet cert should be completed is important in helping them to feel more in control of the process though it is the vet signing it. It helps them to know what information needs to be provided and why.
- The UK is not self-sufficient and the EU is an essential source of imported product for manufacturers, wholesalers, foodservice, catering and retailers. (See IMTA Self-sufficiency myth briefing). We need export markets and import sources of supply to complement our domestic production and ensure consumer choice, food security and carcass balance. Trade between the UK and EU is a critical part of this. Therefore the UK import policy must acknowledge that imports are a core role for UK consumers.
- We have concerns about whether the UK will have sufficient veterinary resource for the additional Border Control Posts and checks that come in from April (100% documentary checks) and then in July (minimum 1% physical checks). Sufficient resource in this area is fundamental to ensuring UK food security and we need assurances that steps have been taken to resource this properly. We need urgently to know more detail on this ‘minimum 1% check’ and locations of Border Control Posts. Some of these we understand will be inland given that there may be a lack of space for these facilities at some ports. This detail is needed now as again supply chains need to understand the impacts on transport costs and how they deliver to their customers if located somewhere entirely different to the inland BCP.
- The UK needs electronic certification systems and as soon as possible allowing electronic submission of import health certificates in to IPAFFS.
- Customs agent and specialised freight forwarder capacity. Pre-notification process is often done by these agents rather than in house and within the overall picture of limited numbers of agents there is a limited number of agents that specialise in this sector.
- On the UK import system we urgently need more detail otherwise it will be impossible for companies and their supply chains to prepare.