Yahoo Finance Brexit: Shoppers face less choice and higher prices as food suppliers ditch UK over new red tape
UK shoppers will see less choice of food and steep price increases as EU suppliers shun the UK over the latest round of Brexit red tape, retailers and hauliers have warned.
Specialist food shops in particular are being hit hard by bureaucracy introduced on 1 January with some fearing that their businesses will no longer be viable when physical checks on food imports are introduced in July.
One haulier likened Brexit to “death by a thousand cuts” as EU companies increasingly shun the UK with each new round of paperwork, administration and delays.
In London’s Borough Market, traders selling produce from around the world should be gearing up for a good year as the pandemic recedes and tourists begin to return.
Yet, many in the famous market are nervous, said Klaus Kuhnke, owner of German Deli, which he founded in 1999.
His transport and administrative costs have doubled, and shipments take days longer to arrive than they did before Brexit.
To use one example: a packet of yeast that might sell for a couple of pounds now faces customs charges of £5 on the UK side and €5 on the EU side.
“I can’t stock that product anymore. Where’s my margin? I’m paying more for the administration than the product itself,” he said. “The whole thing is stupid and pointless.”
When physical checks on food are introduced in July this year, Kuhnke estimates he won’t be able to offer around a third of the products he stocks now.
“My fear is that I won’t have a viable business anymore,” Kuhnke said.
The logistics firm he had used for 20 years recently told him they would no longer transport his goods because it wasn’t worth the hassle.
Two of German Deli’s suppliers have also said they will no longer send goods to the UK. “They cannot be bothered to fill in the additional paperwork.”
“As a small business, we are just hoping that the big boys kick up such a fuss that things are fixed.”
James Withers, chief executive of Scotland Food and Drink, said export controls introduced in 2021 had been “terminal” to some UK food businesses’ EU sales.
“The same may happen under the new UK import controls brought in this year. Some EU businesses may decide there are just easier places to do business than the UK,” he said.
From 1 January this year, certain food imports have to be registered on a system called IPAFFS which has had teething problems and is not yet fully operational.
Shipments must have customs declarations in place and can now also be selected for physical customs checks, meaning they have to drive to a facility and wait.
Lorries leaving the UK have also faced long delays, in part because they now need to present what’s known as a GVMS number at the port. Checks of even a few minutes can cause big tailbacks at Dover, adding further to costs.
Shane Brennan, of the Cold Chain Federation, which represents temperature-controlled logistics companies, warned that the new system had not yet been tested properly and problems could worsen.
“The real test of all of this will be as the non-UK specialist exporters and hauliers try to use the system. Will they encounter greater hold-ups?
“More likely, when faced with the realities of additional work and cost is involved in trading across the EU-UK border, they will decide not to do it.”
Niraj Agrawal, compliance manager at PML, a haulage firm that specialises in moving perishable products, said new rules had slowed down the process of importing goods significantly.
“Until 1 January there was free movement of traffic into the UK. Even if a lorry didn’t have customs declarations it would be allowed to move through the port and deliver to the customer.
“Now they can’t get through the port of departure in the EU without a customs declaration in place or special authorisation.”
Haulier Julie Bates is now hardly moving any small shipments because it is too costly and takes too long. Some customers have given up importing and exporting altogether and new import controls on the UK side have made the situation worse since 1 January, she said.
“We now have a well-known food company struggling with new documentation for exporting their products this year. It’s quite scary. They are stuck not knowing what to do.”
Freight prices for moving goods into the UK have been rising since last year and will be passed on to the consumer, she said. As well as a driver shortage, large queues and delays on both sides of the Channel are adding to costs.
“The rates might put off EU companies from selling in the UK and we have less and less choice now in this country,” she said.
“If we don’t buy from the EU where do we buy from?
“Having worked in freight since 1985 this is the worst I have seen it. Switzerland is a piece of cake compared to this. I am drowning in extra red tape.
“I cannot understand why we have basically imposed sanctions on ourselves.”
