Following the UK leaving the EU, new controls have finally been brought in for EU imports. This is to bring the EU into parity with the rest of the world, and to improve biosecurity.
April brought in the next tranche of changes, and there are more to follow in October.
We explain more in this blog, as well as suggesting steps you can take to combat disruption and reduce chance of stock delays.
While procurement and operations teams are likely to already be deep in management of April changes and in preparation for October, the rest of the company should be informed, especially marketing, people management and frontline workers. Here, we create an explainer to educate your team about these significant alterations to how produce enters the UK, and some potential consequences to prepare for.
What do the April changes entail?
Following Brexit, new controls have been brought in for EU imports: the ‘border target operating model’ (BTOM). These categorise live animals, animal products, plants and plant products according to a risk category and introduce measures including pre-notification of import, health certification requirements and physical inspections.
From January, medium and high-risk imports of animal products, plants and plant products, have been required to come accompanied by health or phytosanitary (plant health) certificates.
30 April brought in the next phase, with physical checks introduced at border control points and a ‘common user charge’ for imports of animal, plants and plant products. Checks will apply to raw, chilled and frozen meat and dairy products, as well as some fruit and vegetables. Despite reports of delays, the government commenced checks on higher-risk products, to then scale up.
Following 30 April, there has been initial concern over high financial impact.
What is expected in October?
On 31 October, checks will be extended to west coast ports and safety and security declarations will be extended to most imports from the EU. However, the general election means that this may be subject to change. Labour have reported that they will not seek to re-enter the customs union with the EU, but would seek a veterinary agreement to help businesses deal with paperwork at the border.
What will the consequences be?
1. Raised food prices
The Government estimates that the cost to businesses dealing with the controls will be £330 million per year. This will be caused by factors like more staff needed to cover shifts due to longer time at borders, paying professionals to make the checks (including veterinary workers, who are in short supply), increased fuel for travel to the border checking points, lost revenue due to delays and damaged produce, paperwork costs and more. Mounting costs across the supply chain will translate to an estimated hike in retail prices of 0.2 per cent over three years.
2. Delays
Physical checks are expected to take place at designated border control posts, some newly created for BTOM and some pre-existing. However, there are fears that these sites are not ready with key details such as opening hours and scope of what exactly each destination will process. Delays have already been experienced as teething problems are ironed out, and for the often extremely perishable plants and produce that the checks apply to, items could be spoiled and unusable by the time they arrive with the buyer. Delays will also result from some of the control posts being far from the point where goods enter – one destination for import checks is 22 miles from the Port of Dover.
3. Reduced exports from the EU
Many industry bodies are warning that EU importers are not ready with the requisite certification. There has not been enough outreach and importers do not understand what is needed from them. For many EU businesses, the UK is not a big enough market to make getting to grips with the complex new requirements worth their while. Manufacturers will lose their suppliers, especially niche, smaller operations, and distributors may see a downturn in demand.
How has the Government planned to lessen the impact?
The Government has plans for Trusted Trader schemes, where regular importers can avoid inspections. It is also planning to lessen the checks for low-risk consignments like processed food. A single digital hub called the Single Trade Window is in development. This government service will allow traders to submit necessary information in one place, as opposed to having to upload forms to multiple different systems managed by different border agencies, as they currently do.
What can you do to prepare yourself?
- Audit your EU suppliers and check that they all understand what is required at the border and are prepared for checks. Contract Management software can help you do this, allowing you to profile suppliers against risk categories and score their level of compliance.
- Find alternate local suppliers for circumstances where the delay and disruption is too much to justify.
- Consider whether you or your suppliers could be involved in the Trusted Traders scheme. Applications have closed for the pilot, but you can read more about it and email the Department for Environment, Food and Rural Affairs asking for more information here.
- Ensure your team is educated about the changes and that contingency plans are in place for if journeys take longer than usual or stock takes longer to arrive.
- Invest in a strong Supplier Management software system, which ensures that purchases are only raised against a supplier that is compliant with regulatory requirements. Purchase orders can be managed to ensure a condition of purchase is the ability to provide valid certification.
- Assess potential new suppliers based on their plans for compliance. Preparedness for the EU border changes or even being a Trusted Trader (when the scheme is in action) could be inputted into Sourcing Management software as a prerequisite, ensuring your supply chain is built ready for the border checks from the ground up.
The disruption caused by the Border Target Operating model is inevitable, but with a proactive mindset and smart investments, manufacturers and distributors should be able to weather the storm.