Brexit import rules start to squeeze UK food importers


LONDON – In a warehouse tucked under two railway arches in southeast London lies a treasure trove of Greek delicacies, including barrel-aged feta, fresh oregano, Cretan olive oil and cases of nearly a hundred different wines destined for the city’s best restaurants and the discerning home. cooks. But as Britain gradually implements the customs rules required by Brexit with the European Union, the tempting variety of Maltby & Greek is under threat.

The additional forms, customs fees and health security checks required for goods to cross the UK border are particularly arduous for companies transporting small quantities. This includes specialist food importers who buy from small suppliers across the European continent who have helped make London one of the best cities to eat.

This has “minimised our ability to discover and import unusual products,” said Yannos Hadjiioannou, the owner of Maltby & Greek, which for the past decade has imported food and wine from Greece and its islands. boasting of products rarely found in Britain. On Saturdays, under the arcades, customers taste goat’s milk butter; Mastelo cheese, a kind of halloumi made from cow’s milk from the island of Chios; mountain tea bouquets; and the Gigantes pale beans from Feneos, in the northern Peloponnese.

Getting each of these here got trickier just over two weeks ago.

After a year of delay, on January 1 Britain tightened its enforcement of customs requirements for goods from the European Union, which in 2020 accounted for half of all imports into the country. From now on, the goods must be accompanied by customs declarations. (Last year, UK importers could delay reporting by around six months.) And companies importing animal and plant products – most food, for example – must notify the government of shipments in advance.

At the border, the introduction of the rules went relatively smoothly. DFDS, a Danish logistics company that runs ferry services to Britain, said some customers filled out paperwork incorrectly and some food shipments were stopped. One day, shipments from the Netherlands had to be interrupted to deal with a backlog from the day before.

“Everyone involved tried to learn from what happened a year ago,” said Torben Carlsen, DFDS chief executive.

Last year, the European Union introduced customs rules as soon as Brexit took effect, and immediately the problems piled up: deliveries were delayed, trucking companies stopped serving Ireland and food spoiled in ports. It took over a month before most of the issues were resolved.

Britain could not afford the same import problems this year. On a quarter of the country’s food is imported from the European Unionaccording to 2019 data, a figure that jumps considerably in winter for fresh fruits and vegetables.

But there are challenges — invisible, far from the border. Some UK companies pick up the export costs from their European suppliers to avoid losing them. Others simply import less, reducing customer choice. Still others limit purchases to bulk orders and give up trying new products.

The decline was noticeable even before the start of the last import rules. In the first nine months of 2021, food and drink imports fell about 11% from 2019, according to the Food and Drink Federation.

After Britain left the European Union’s customs union in early 2021, Mr Hadjiioannou kept business as usual, he said. Within six months, however, the additional customs fees and associated price increases became prohibitive. It stopped receiving weekly deliveries of anthotyro, a soft fresh sheep’s cheese from Crete, and traditionally strained sheep’s or goat’s yogurt, leaving popular products regularly out of stock. Cretan sausages are now frozen instead of fresh so they can be sent in larger, less frequent deliveries.

“Most perishable products suffered, especially those that were small in volume but important to many restaurateurs and delicatessens,” Hadjiioannou said. The biggest disruption of Brexit was the loss of flexibility, he added.

Maltby & Greek’s warehouse is at Spa Terminus, a long strip of railway arches housing food producers, wholesalers and wine importers. At this time of year, fresh produce from its markets include Sicilian citrus fruits, Italian leafy greens and French root vegetables. Unlike Maltby & Greek, Rachel Sills sells cheese made in Switzerland and the Netherlands. While her experience exporting from Switzerland softened the blow of Brexit trade rules, it did not protect her from additional costs.

She buys cheese from four small producers in the Netherlands, so small that not all of them have email addresses. Now, everyone must have an economic operator registration and identification number, as well as customs officers to carry out export and tax formalities, and they must complete more detailed invoices, which include tariff codes.

Ms Sills said she had covered the additional costs of export permits for the cheese makers. Recently, she was able to combine orders to pay just 65 euros ($74.50) for each invoice, plus her own import fees. “So at this point they haven’t started paying the actual costs of export taxes,” she said. “I have.”

It’s not that the paperwork or the cost is actually that onerous,” Ms Sills said. But for companies with many suppliers, “when you add up the cost of each, it becomes insane,” she said, especially if you’re buying small volumes.

And that’s what Brexit has come down to for these companies so far: extra costs.

“We are past wild shortages,” said David Henig, a trade policy expert in London. The customs systems are working, but the damage will be more like a “slow boiling frog”. The extra costs will eat away at the UK economy, with independent forecasts pointing to a long-term shortfall of around 4% of gross domestic product. For customers, the overall effect is likely to be less choice, Henig added.

It also continues to reduce business incentives to invest in Britain.

“We are less UK-centric than a few years ago,” said Franco Fubini, the founder of Natoora, which started in London in 2004 and now supplies fresh produce from hundreds of small farms across Europe. and in North America to approximately 1,600 restaurants worldwide and stores like Selfridges and Whole Foods, with outposts in the United States.

Natoora has revamped its internal processes so that the UK branch of the company no longer imports anything directly from farms in Italy, France, Spain and Greece. Instead, more staff were hired in Paris and Milan so that products could be purchased by mainland hubs and then sold to the London office. This consolidation means there is only one invoice, which saves money on trucks and customs.

Even though Natoora found a workaround, Mr Fubini said Brexit had damaged Britain’s international reputation, making him reconsider the future of his business. “For the first time in 15 or 16 years I really started to wonder how much we should continue to invest in the UK,” he said.

When Prime Minister Boris Johnson announced the new trade deal with the European Union on Christmas Eve 2020, he said the deal “should instead allow our businesses and our exporters to do even more business with our European friends”. In reality, it made things harder, not easier. Brexit could free Britain from Brussels bureaucracy, but it has crippled businesses in other red tape. While the promises of Brexit were varied – from opening up new markets to deregulation – the slowness in delivering the benefits has frustrated even his supporters.

Spa Terminus’ other fresh produce market, Puntarelle & Company, is run by Elena Deminska, who said Brexit could be a great opportunity for UK farmers to produce some of the food mainly imported from the European Union . The country has the climate for bitter winter lettuce or broccoli rabe or, “with a little effort”, apricots, Ms Deminska said. Instead, she complains that farmers are “not flexible”.

About four years ago, with great foresight, Ms. Deminska outsourced her customs work to an outside company. Yet she despairs of the Brexit-induced red tape. “It’s just not helpful,” she said. “There’s already enough paperwork.”

For all of these businesses, there are more hurdles to overcome. From July, food imports will have to be accompanied by health certificates signed by European Union inspectors and could be taken for spot checks at the border.

These changes “will only add complexity, increase costs,” Fubini said. “It’s disruptive.”


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