The final round of post-Brexit border controls set to roll out in July this year will further amp up prices amid what are already high levels of inflation.
Trade representatives from across the food industry warned MPs that the final stage of the Border Target Operating Model, which will see planned checks on some fruit & veg products from the EU, would add further strain to businesses.
This would in turn result in higher grocery prices for Brits, the Environment, Food & Rural Affairs (Efra) Select Committee heard this week.
The last round of checks on EU goods, set to be introduced on 1 July, has been delayed from October last year.
Trade association chiefs have said they will come with increased costs and could potentially make it “unviable” for some businesses to even trade with the EU.
“Undoubtedly new processes and new costs have to go somewhere in the system,” Logistics UK head of trade and devolved policy, Nichola Mallon, told the committee. “Our concern is that we will see an increase in higher prices on staples and people’s diets. And of course that comes at a time when food inflation is already high.”
Food inflation remains high at 3.3%, according to the latest government figures. It was forecast to hit 5% by the end of 2025 as a result of the costs arising from the budget, the BRC said.
Read more: Food inflation steady at 3.3% as industry braces for spring budget
Fresh Produce Consortium CEO Nigel Jenney claimed that the regulations set to affect the fruit & veg sector – “one of the largest that feeds our nation” with a heavy reliance on EU imports – would significantly increase costs for the industry.
However, Jenney said there still hadn’t been “any official confirmation” from Defra on whether the controls would indeed roll out at the expected date, and that the government had given traders “little communication for months now”.
He noted fresh produce importers relied on the groupage model, which moved frequent loads of mixed goods from oftentimes different parts of the EU and therefore faced a wider variety of checks and fees at the border compared with others.
“[Groupage] is the particular model that’s being squeezed in all of this,” Mallon added. “It’s increasingly not becoming viable for the movement of SPS goods.
“Most haulage companies operate on a tight profit margin of about 2.5%. Their ability to absorb the costs of all of the certificates that are required and the checks is minimal.
“So to some degree, there is inevitability of that being passed on to the GB consumer and our industry is very conscious that consumers are already struggling with high food inflation, so that’s the last thing that we want to see happening, but it is an inevitable consequence because the logistics industry can’t continue to absorb it.”
Logistics UK had asked both the previous and current government to “publish the modelling behind the assertion that the BTOM will impact food and drink inflation by 0.2% over three years because from our feedback members, we would question that”, Mallon said, but had not received answers yet.
Experts told MPs that increasing SPS and plant health fees, as well as costs linked to delays and goods being mishandled at the borders, were all adding pressure to businesses’ wallets.
In addition, they highlighted to the Efra Committee members that the BTOM had not been entirely enforced across the whole country, as west coast ports were still waiting to implement the same levels of physical border controls on goods entering Britain via Ireland and Wales.
New border control posts (BCPs) are still needed at Holyhead, Fishguard and Pembroke Dock to perform SPS checks. Once in place, these will bring further costs to industry.
Mallon also said there was no detail as to how these would interface with the Windsor Framework requirements in Northern Ireland.
Read more: British food and drink exports slump by over a third since Brexit
In a Food Standards Agency board meeting on Wednesday, FSA chair Susan Jebb acknowledged that the lack of information coming from Defra in relation to the timeline for border checks across west coast ports was a key concern.
Jane Clark, FSA director of veterinary services, added: “The government has committed to provide a further update on the implementation by the summer of 2025 and we’re working closely with FSA Ireland to protect the health and interests of consumers across the whole island of Ireland.”
Jebb also admitted that the rollout of the BTOM had not been without its challenges.
“There’s still a challenge when it comes to the availability and access to data, and the legislation that we need for some elements related to risk management [of goods] is still not in place.
“So I don’t think we should pretend that this is the job done,” she said. “It’s a work in progress.”
Other issues around the BTOM discussed by the FSA board included lack of personnel at the border to conduct proper biosecurity checks and glitching IT systems.
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