THOUGHT THE WORST OF BREXIT WAS OVER?
Last week, further export regulations put massive pressure on small Irish producers, who are questioning if it’s worth their while to continue doing business in the UK
ON WEDNESDAY morning down at the Dublin docklands, it was business as usual as heavily-laden trucks and lorries lined up to take their places on ferries bound for the UK. As of midnight, a new post-Brexit export regime for goods heading across the sea had come into effect, but there was little sign of any chaos or confusion. ‘There weren’t any problems,’ says Simon McKeever, the chief executive of the Irish Exporters Association. ‘There was no disruption, nobody has been screaming at me.’
It was unlikely there would be scenes like those seen regularly in Dover over the last few years — thousands of trucks queuing for days to get through the channel tunnel into France due to red tape caused by Brexit restrictions introduced by the EU at the start of 2021. Farmers and business owners have watched helplessly as millions of euro worth of fresh produce rotted in containers, while border officials struggled to check documents for goods being exported out of the UK into the EU.
The comparative serenity at Dublin Port this week can probably be explained by how much time it has taken for these new rules for goods being imported into the UK to be finally rolled out — nearly eight years after Brexit was voted for and exactly four years since Britain formally left the EU.
It’s clearly a step few have had any appetite for, not even the British government, which has delayed the process being introduced at least five times. It’s estimated these new checks, which affect the importation of EU plants, meat and other animal products, will cost British businesses about €386million a year and push up food inflation by about 0.2 per cent over the next few years — although some industry experts predict the effects will be far harsher.
THEN there are the knock-on effects for Irish producers, where there’s a consensus that bigger businesses, used to exporting all over the globe, will ‘suck it up’. But smaller outfits will struggle with the extra administration costs and manpower the regulations require.
‘The moment you start selling something in the world of the movement of goods, it has to have a commodity code, which does not take into consideration scale,’ explains Sarah Furno, joint owner of the Cashel Blue cheese company. ‘It’s a clumsy way of managing trade between trading blocs. The more niche you are, the tougher it is. Trading pays no interest to complexity and diversity, so the latest stage of Brexit requirements is creating an impossible environment, in terms of resources, for niche producers.
‘It’s really sad, and it’s the same for British producers.’
The trading relationship between Ireland and Britain has always been crucial. Last year the total trade in goods and services (exports plus imports) came to €103.32billion, which was an increase of almost 16 per cent on the year before.
Of that figure, imports from the UK into Ireland came to a total of €67.44billion, an increase of just over 18 per cent on 2022, while Ireland exported €35.77billion worth of goods and services to the UK, an increase of almost 12 per cent on the year before.
Ireland is the UK’s sixth largest trading partner, accounting for just under 5 per cent of its total trade, while the UK is our fourth largest export market.
We sent €5.3billion worth of organic chemicals there last year, followed by almost €2billion worth of meat and meat preparations. Britain also loves our dairy products and eggs, taking over €983million worth in 2023.
It certainly helps explain the reluctance to make the exporting/importing process any more difficult or timeconsuming than it already is.
‘It was all in the control of the British government,’ explains McKeever. ‘Ireland is a critical food nation for the UK, they didn’t want to upset that.
‘But the main reason is that they simply weren’t ready — for a number of years they couldn’t get a deal. The last time, as I understand it, they postponed it because there was a newspaper article saying it would impact their economy by 4 or 5 per cent. So the government stopped it, did its own study, which found it would be more like 0.2 per cent, and then went ahead.’
As with most things involving Brexit, it has been a long and bumpy road for this Border Target Operating Model (BTOM), which is being introduced in three phases. Since Wednesday there are new paperwork requirements, including health certificates, for EU businesses sending animal and plant products to the UK. At the end of April, physical checks will be introduced, while from October there will be safety and security declarations.
It’s estimated that the number of export health certificates will treble to over 100,000 a year, adding an extra significant concern about who has to produce these certs — namely vets, from an already overstretched pool.
Only a few months ago the outgoing president of Veterinary Ireland, Paul McDermott, warned that it may soon be ‘impossible’ for farmers to access a ‘large animal’ vet because of growing countrywide shortages. It’s not just here that there is a chronic shortage of vets, it’s across Europe.
It will also cost money. In the UK, where checks have been in place for the last three years for goods being exported into the EU, around 850,000 health certificates have been issued
by vets over there, which amounts to around 1.7 million hours of work, charged at almost €117 per hour.
The BBC reported this week how the Chilled Food Association, which got access to these figures through Freedom of Information, has calculated it will require its industry to generate €9.93billion in extra sales to cover the vet costs.
BUT it is smaller food production businesses which will be most affected. The Guild of Fine Food, which represents 12,000 businesses, told how it fears new red tape and extra costs will lead to some cheese and meat producers simply deciding to pull out of supplying the UK.
‘I’m just worried that we are going to end up buying and selling only mass-produced products,’ GFF managing director John Farrand told one media outlet. ‘Are we going to see the end of smaller, more interesting products, which are ultimately better for the planet?’
Phelim O’Neill, markets intelligence specialist with the Irish Farmers Journal, says large Irish exporters will already be ‘totally familiar with’ the new regulations for exporting into the UK.
‘While they are a pain and there will be an administrative cost, they are well capable of dealing with them,’ he explains. ‘We export a lot of agri-food products outside of the EU — basically what they had to do to export to the US or Africa, they now have to do for the UK.
‘Nobody wants more bureaucracy, nobody wants more forms to fill in, but for large businesses, it’s no problem at all. Small and micro businesses, however, are a different story altogether, they will need the same administration as a 20-tonne container would need, they won’t have the same skills, or an export department as such. Some might simply not be bothered [exporting to the UK any longer], I know that’s what happened the other way around, a lot of micro UK cheese businesses stopped selling to continental Europe after the border controls were introduced in December 2021.’
He points out that 90 per cent of Irish produce is exported.
‘Exporting is in the DNA, as is problem solving,’ he says. ‘That’s why we’d be reasonably relaxed that the large volume exporters will deal with this. The vibe we’re getting from the UK is that in the initial stages they won’t be turning stuff back, they’ll be educating rather than policing.’
Cashel Blue cheese, one of Ireland’s most recognisable specialist dairy brands, has been exporting to the UK since the early 1980s. Back then it was a few dozen wheels at a time, now it sends 70 tonnes a year, which accounts for between 15-18 per cent of its total business.
‘We only sell in independent shops and Michelin restaurants over there,’ says co-owner Sarah Furno.
ONE of the largest producers of farmhouse cheese in the country, Cashel Blue is used to exporting around the globe, so is prepared for the new regulations. However, the cheesemaking world is a small one, where problems faced by the industry are felt by everyone.
‘The problem with all these layers is that the more hands it passes through, the more costs that are incurred,’ explains Furno. ‘We pasteurise our milk, but [others work] with raw milk, it makes it impossible for them, because they’ve got to have vets coming to them to inspect their premises. All we’ve got to do is move to working with heat-treated pallets.
‘We’re also used to paperwork but for smaller places, typically there’s just one person in administration and sales. It’s not insurmountable but there’s been a lot of training, and we already work in a very regulatory environment. This bureaucracy overload is overwhelming, the endless government training sessions about whatever the latest round of Brexit is bringing.
‘You would be seriously asking yourself as a small producer, does it add up? Do I want to invest this time and resources?’
In a country already famed for its own cheeses, Irish produce has made a huge impression in the UK, and each year about 125 of the 500 entries in the Artisan Cheese Awards come from Irish dairies, where they’ve had some success.
However, it’s proving harder for UK outlets to get access to Irish specialty produce. Furno was at a trade event last October where she met acclaimed Irish chef Anna Haugh, owner of Myrtle restaurant in London.
‘She told me how they’re trying to use as much Irish produce as possible and she would have bought directly in really small volumes to use in the restaurant,’ Furno explains. ‘But the cost of the paperwork alone to import it now is a minimum of €80.
‘There’s no way they can do that. It’s the same for stuff like black pudding, which has all sorts of veterinary implications, but it is the better product.’
Brexit, says Furno, has done nothing but hinder the speciality dairy industry, both here and the UK. ‘Nobody is talking about new product development,’ she says. ‘It’s all about survival.’
She adds: ‘But I do want to acknowledge that because of this long relationship, British importers of Irish speciality cheese feel a sense of responsibility and they’re doing everything they can to keep doors open, which is lovely to see.’
MEAT Industry Ireland is the Ibec sector association which represents the primary beef, pork and lamb processing facilities in the Republic of Ireland. Director Dale Crammond says that the extra paperwork does exist but its members are complying.
‘MII meat processors have known about these changes for a long time,’ he says. ‘Significant preparation has taken place on the ground between Department of Agriculture, Food and the Marine veterinary officials and the technical teams in our plants.
‘We are now a few days into the new trading regime, and while it has undoubtedly created an added layer of bureaucracy, we are successfully adapting to the new reality. Our world class products will be on the UK supermarket shelves this weekend and ultimately this is what matters most.’
Simon McKeever also acknowledges it will be smaller businesses who will struggle most.
‘When you add it on top of other things coming this year, like the auto-enrolment pensions and adjustments to minimum wages, it all adds to the layers of complexity,’ he says.
However, he doesn’t expect there to be ‘border post infrastructure’ on the UK’s western seaboard, even by the end of next October.
‘This had to happen, [Britain] had to implement it,’ he says. ‘But I think it’s being done in a fairly pragmatic way.’
He points out the availability of training courses for businesses of all sizes which are unsure of what the regulations will mean. He believes most, if not all, will continue to trade with the UK.
‘We saw, by and large, that companies in Ireland adjusted to the import side of things when the UK brought it in,’ he says. ‘If you’re an Irish company with serious ambitions to grow, then you have to export, so I don’t believe a lot of companies will turn their backs on the UK. It’s a huge market and it’s on our doorstep, this is something they will need to get over and understand and there’s plenty of help available. It’s just about learning how to do the thing.’