EU food exports to the UK are about to go vegan

Aug 2, 2021 1:12:58 PM

On 1st January 2021 the EU introduced a series of controls on imports of animal products from Great Britain. It is no exaggeration to say that this created chaos, and seven months on, UK food exporters are still struggling to recover. The UK, meanwhile, delayed the introduction of similar controls for most animal products arriving from the EU, but this will soon change. On 1st October 2021 all products of animal origin entering Great Britain from the EU will require certification and registration. On 1st January 2022 a further requirement for inspection of arrivals will be introduced. Both of these requirements are likely to dent, or even reverse, the anaemic recovery in food imports from the EU to the UK. What should or can be done to prepare for these critical changes?

Controls on animals, animal products and plants are known collectively as Sanitary and Phytosanitary (SPS) controls. They are routinely applied to imports from 3rd countries to ensure that certain minimum standards are met, regardless of the origin of the imports. Requirements vary, but if we focus on imports of products of animal origin (food products, for example) exported from the EU to the UK, the additional steps will look something like this:

  • - The EU exporter will need to have the goods inspected by a veterinarian prior to despatch. The vet will produce an Export Health Certificate to confirm that the goods, and the supply chain through which they have passed, meet the standards required by the UK (required 1st October 2021).
  • - The UK importer will need to register the shipment (on the IPAFFS system), providing pre-notification of arrival to the receiving authorities (required 1st October 2021).
  • - The UK importer will need to arrange for the shipment to be inspected on arrival in the UK (required 1st January 2022).

As an aside, these requirements are completely unaffected by any special customs procedures used, although the UK has indicated that it will apply certain simplifications in practice. Therefore, shipments using deferred declarations, shipments moving to a customs warehouse and shipments simply transiting the UK would all be subject to SPS controls.

So how do you know if these controls will apply to your goods? Basically, anything that contains any products of animal origin (e.g. meat, fish, eggs, milk, honey, etc.) is likely to be affected. The one exception is composite products, which contain both animal and plant components, where SPS controls do not apply provided:

  • - there is no meat content, and
  • - the animal origin component is less than 50% of the whole, and
  • - the product is shelf-stable at ambient temperature or has been de-natured by extreme heat treatment[1].

Obviously, we can expect a lot of disruption to supply chains when these new rules are introduced for UK imports. It is doubtful that there will be enough vets to conduct the inspections required. Shipment lead times will increase due to paperwork and registration requirements, particularly if vets are not available outside standard office hours. It is likely that there will be confusion in the practical application, either due to misunderstanding or just plain ignorance of the regulations. Even shipments containing no animal products may be affected if they are flagged for checking based on commodity code or keyword searches of the goods carried. Finally, importing companies that are not incorporated in the UK may find it difficult to make the registrations required in the IPAFFS system.

As mentioned above, this situation has been in place for EU imports from Great Britain for many months. The chairman of Marks and Spencer, in a recent radio interview, stated that they had to produce 720 pages of documentation for each truck entering Ireland and that 40% of shipments were experiencing delays. As things currently stand, the same controls will also shortly come into full force for shipments from Great Britain to Northern Ireland. The number of companies (and consumers) potentially impacted is, therefore, extremely large. Exporters and Importers in the EU, Great Britain and Northern Ireland must either find a way to operate in compliance with these controls or reconcile themselves to going vegan.

Various solutions present themselves as ways to overcome these new difficulties. The most popular may once again be to outsource the performance of the new tasks to a broker, freight forwarder or other service provider, however it is probable that more than one provider would be needed and costs are likely to be high. The creation of a new internal capability, possibly with staff based in the UK, is another option, but this could be unpopular due to overhead and direct tax considerations. A third option would be to exit the UK market or to drop products from the UK range, assuming reformulation was not practical. Difficult decisions for any business to take, but understandable where resources are limited and the administrative burden is disproportionate.

Obviously, no single solution is going to be right for all situations. The common theme, however, is that good (or at least adequate) preparation is needed in order to minimise the business impact of the upcoming changes. The companies that will emerge from this as winners, whether they are EU exporters or UK importers, are the ones who understand the situation best and take appropriate decisions in a timely manner. These are the businesses that will be able to exploit the opportunities created by this marketplace disruption.

[1] Technically speaking, the product must meet the requirements of Article 6 of Commission Decision 2007/275/EC.

Now is not the time to delay. You may need to take immediate action to maintain customs compliance, you may feel trapped in an inefficient mode of operation or you may want to be better prepared for the next Brexit cliff edge. Here at Centigo, we have over 300 consultants who are highly qualified, well trained and deeply experienced across a wide range of industries. In particular, we have experts in efficient supply chains, customs and border clearance who have helped businesses large and small through this kind of process before. We can bring to the table tried and tested approaches which can be tailored to your specific needs.

If you need help or have concerns, please contact our Partners in the UK:

Contact Ragnar Agnell

Contact Kevin Bell

Read the previous article on UK/EU supply chains

Read the previous article on Post Brexit


Tags: Digital_Transformation Digital Value Chain Innovation Brexit Centigo_UK Sustainable Growth Digitization Corona Sourcing Supply_chains COVID-19 Working_Capital Sustainability Transformation