How will Brexit labelling changes affect Great Britain-Northern Ireland trade?

The DUP secured an agreement with London to get rid of the Windsor Framework’s ‘green lane’ – a trade system set up by the UK and the EU last year to improve the flow of goods from GB to NI. It is to be replaced with a so-called UK internal market system, whereby all checks and customs paperwork for British goods staying in NI will be ditched.

But there was a downside. At the same time, the government announced plans to press ahead with UK-wide ‘Not for EU’ labelling proposals, much to the discontent of the industry, which has warned of the associated costs for months.

So, what exactly are these labelling requirements, why are they necessary, and how will they affect GB businesses?

The labelling changes were initially a requirement of the Windsor Framework’s green lane. The first stage of the labelling rollout, in NI supermarkets, required all meat and some dairy products to bear individual labels from October 2023.

The requirements are set to roll out to more products, as well as across GB, throughout the next year-and-a-half, meaning most supermarket goods will have to bear the ‘Not for EU’ label from 1 July 2025.

The aim is to “ensure no incentive arises for businesses to avoid placing goods on the NI market”, the government said in its recent ‘Safeguarding the Union’ command paper.

However, Food & Drink Federation chief Karen Betts has questioned the need for such measures. Members are already using the full range of options to supply the NI market, including the green lane with ‘Not for EU’ labels, the red lane, and via the Republic of Ireland, she reported.

“Our members have worked hard to ensure shops in Northern Ireland continue to be well-stocked under the new Windsor Framework rules, and we think this is working,” she says. “Imposing costly, complex labelling changes before we know it’s necessary risks pushing up manufacturing costs for the sake of it.”

Business impact

Costs are the clear issue here – and certain businesses are bearing these already. Some companies whose products were in scope of the first phase of the NI rollout in October have added the ‘Not for EU’ mark to all UK-supplied stock, to avoid having two lines of packaging production.

However, many also export to other countries in the EU, which means they will have to divide product lines between those for export to the bloc and those for the internal market.

This is the case with Arla, whose milk cartons bearing the label can now be found in supermarkets across the UK –despite the rules not extending beyond NI until October.

The company admitted this had added “a new layer of complexity to our business due to the need to handle UK/NI and EU products separately”.

One UK dairy company has reportedly claimed the new labels alone will carry a cost of £1m a year.

Read more:

• Food goods to ‘flow freely’ between Britain and Northern Ireland as post-Brexit checks end

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• Northern Ireland can finally reap rewards of its ‘special status’

• Brexit border rules: the big questions still to answer on imports

The UK government has established a £50m transition fund to support the rollout of the labelling requirements, but it’s not yet clear how these funds will be distributed.

In the face of this uncertainty, the FDF’s Betts claims the costs will have a “chilling effect on UK food and drink exports”, and “more broadly on investment in UK businesses”.

There are particular concerns over the impact on GB trade with the Republic of Ireland, which remains the UK’s largest overseas food and drink destination.

Lack of clarity

There are further unaddressed questions. It’s still unclear whether all EU exporting businesses selling goods in NI and GB will need to follow the rules.

Another issue is goods produced in NI appear to be exempt from ‘Not for EU’ labelling, irrespective of where they are sold, the NFU has pointed out.

These are just some of the many “odd quirks” noticed by traders in the proposals, according to the British Meat Processors Association.

In other examples, GB producers who choose to send goods to NI through the red lane are not bound by the ‘Not for EU’ rule as they will have met all the certification requirements for the EU. However, that same fully compliant product being marketed in GB supermarkets would be required to have the ‘Not for EU’ stamp.

Such discrepancies have the potential to create a “two-tier market in which consumers may perfectly reasonably assume that one set of product is good enough for the EU and another not”, says a BMPA spokeswoman.

Finally, it is also still unclear which products will have to be individually labelled and which can be labelled at box level.

One senior industry source admits the labelling plans created “a solution for a problem that didn’t yet exist”, but that restoring power-sharing in Stormont was a bigger priority.

“This is a concession Sunak made to [the DUP] because they knew many British businesses would say ‘screw this, we won’t ship to Northern Ireland’,” explains the source. “And they cannot possibly be seen to encourage that.”

It leaves NI in a “uniquely advantageous economic position over anybody else”, the source argues, with “special access to both the UK and EU single markets”.

Defra is currently running a consultation on the Marking of Retail Goods proposals that will close on 15 March. While many respondents will certainly oppose the plans, a viable alternative that doesn’t harm businesses either side of the Irish Sea seems elusive.

“It may seem like a bit of food labelling, but in reality, you’re looking at a much wider political and constitutional matter,” says Rebecca Kaya, regulatory specialist at food regulation consultancy Ashbury.

Nonetheless, the Brexit sell was that the UK would gain independence from the EU’s complex and costly laws. Now, six years on from the referendum, the new labelling requirements appear to be taking us in the opposite direction.