The first bills for the government’s post-Brexit border charges have started to land – and some businesses are in for a shock, industry insiders claim.
Food and drink businesses bringing goods into the UK from the EU via Dover have started to receive the first invoices for the common user charge (CUC), a fee imposed by government in April to recoup the costs of physical checks at its new border control post in Sevington, Kent.
All consignments subject to SPS checks travelling via the Eurotunnel or Dover – including meat, dairy and plant products – must pay the CUC.
While most businesses should be aware of how much they’ll be charged, with a cap of £145 per consignment, some will face higher-than-expected bills, warned the British Meat Processors Association.
The trade body attributed the issue to confusion around what constitutes a consignment versus a truck load. For instance, a truck carrying a mixed load of goods destined for different importers – also known as a groupage load – may end up facing higher bills.
The BMPA said the maximum of “£145 per truck claimed by ministers at the time could end up costing up to £870 depending on the product lines and consignments contained”.
Trade bodies and companies alike have reported CUC bills running into tens of thousands of pounds for the first few months. Businesses are particularly exasperated because the current levels of physical checks are only at around 2%-3% – a significant reduction from the 15%-30% initially suggested when the Conservative government introduced the border proposals.
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Smithfield Foods, which supplies meat to retailers, foodservice and wholesalers in the UK, said its CUC costs between April and June amounted to nearly £30,000. Of 810 inbound loads, only around 15% were diverted for physical checks.
Polish foods importer Spizarnia Food said the CUC bills received this month did not come as a surprise due to “diligent” calculations on their part. However, it reported regularly sending trucks to Sevington that were released without checks to avoid long queues.
“Last week it was around 13 hours that a couple of our trucks had to wait for nothing,” he told The Grocer. “If there are checks, there are only documentary checks, for which they do not need our trucks to be present.”
The new border requirements also came with an increase in labour costs of around £80,000 per year, according to director Przemyslaw Duklas, forcing the company to raise its prices to customers.
“It needs to be noted that the current [CUC] arrangements favour big importers who can import truckloads of uniform goods on one common health entry document (CHED)”, Duklas added.
“Small importers are at a serious disadvantage, and this will definitely lead to quite a few bankruptcies and definitely to a much, much more restricted and expensive offer to UK consumers.”
On top of the CUC, there are also additional charges to consider – BCPs impose a Port Health Authority fee which can vary from point of entry, meaning that at the government-operated facility in Sevington, they will face a double charge on every entry for medium and high-risk goods.
Another Polish foods trader confirmed they would be paying around £145,000 for three months of CUC and port health charges combined. They said the costs would “be passed on to the final consumers”.
Many members of the Cold Chain Federation were prepared for the truck versus consignment confusion and the bills that reflected that, the trade association said. However, the impact on trade has still been significant.
CEO Phil Pluck said: “Our members are resilient and have coped with the introduction of the CUC, but it is clear that health inspection charges and the CUC and Port Authority charges are now impacting.
“Some companies report a drop of between 30% and 40% in business as mainland European producers redirect their goods elsewhere because of the BTOM issues.
“Whilst the CUC charge has been predictable, hauliers also have to cope with a chaotic charging regime from Health Authority charges, which are both inaccurate and ridiculously expensive for a largely paper-based process.”
The government estimated the new border checks would cost around £330m a year, but industry estimates now put the total as high as £2bn.
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The fresh produce sector alone estimates the financial impact to be around £200,000 a year, even though it is subject to “low levels of inspections”, said Fresh Produce Consortium CEO Nigel Jenney.
“In other words, official fees are levied on 97% of consignments which won’t be inspected. Currently even modest levels of inspection aren’t taking place so industry continues to pay for a service which isn’t actually happening,” Jenney noted.
“Many would suggest Sevington and CUC is simply an official government monopoly which is unaffordable and out of control.
“It’s the least efficient and most expensive border inspection process in the world.”
The FPC believes the new government has an opportunity to “adopt a new approach and minimise costs to industry and hard-pressed consumers whilst maximising biosecurity”.
The much-touted veterinary agreement between the UK and the EU, which Keir Starmer has repeatedly promised, “would remove all these trade barriers and added cost”, said the BMPA’s trade policy advisor Peter Hardwick.
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