The government’s controversial post-Brexit labelling proposals will cost the dairy industry millions, the boss of Scotland’s largest independent dairy has warned.
The UK’s ‘Not For EU’ labelling scheme – which has already been rolled out in Northern Ireland and is set to expand to the rest of the country this October – will rack up huge bills for British businesses, according to Graham’s Family Dairy MD Robert Graham.
Changing its packaging to include the new labels, as well as setting up different production lines for UK and exports, would cost the dairy company £300,000 “before even considering the cost of labour time, complexity and additional running costs”, Graham said.
The ‘Not for EU’ labels have been in place for certain goods, such as dairy and meat, produced in Great Britain and sold in NI supermarkets since last October.
It was a measure agreed by the UK government and the European Union in their post-Brexit negotiations last year – a way to ensure food and plant products considered riskier do not cross the NI land border into Ireland, where the bloc’s strict health and biosecurity requirements apply.
But Rishi Sunak’s government has also recently agreed to expand the labels to the rest of the UK, after ministers claimed introducing the labels in NI only would deter some British producers from exporting their goods across the Irish Sea.
This has caused an uproar among GB producers, particularly those with operations outside Britain, who are faced with hundreds of thousands of pounds in added costs.
“For us, this is going to change the way we do things for millions of units every week, which is clearly a huge cost for a family firm,” Graham said.
“The proposed requirement means that we would have to have different packaging between UK and export lines, leading to higher costs across stock, production, branding and operations.”
According to Dairy UK, the financial toll per business of changing labelling alone has been quoted as up to £500,000, and up to £2m per business when factoring in all other costs.
The FDF has urged the government to rethink expanding the rules to the rest of the country, claiming GB members have “worked hard to ensure that shops in Northern Ireland continue to be well-stocked” under the new Windsor Framework rules, which replace the previous Northern Ireland protocol.
The government should first monitor food and drink supplies to NI and only introduce the labels across the entire country if there is evidence these are falling over time, the FDF argues.
Graham said the new requirements “would add unjustified complexity while there is already an overwhelming feeling across the industry that it would make no difference to export trade to Northern Ireland”.
“The food industry understands the complexities of politics but we can’t help but feel this legislation will do nothing for the industry but confuse consumers, increase complexity and heighten costs by millions for the sector.
“It feels like the UK government is using a sledgehammer to crack a nut,” Graham added.
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