UK food prices set to spike amid post-Brexit “common user charge” rule change
05 Apr 2024 --- There are growing concerns over potential price hikes and possible supply shortages for certain products due to the UK government’s decision to levy post-Brexit charges on imports of some key EU food and plant products later this month.
Food items, including fish, salami, sausage, cheese and yogurt, will incur import fees of up to £145 (US$183.55), according to the Department for Environment, Food and Rural Affairs (DEFRA).
This move comes as part of the introduction of the Border Target Operating Model, which the government claims will streamline and secure import processes post-Brexit.
Mike Parr, director of PML Seafrigo, tells Food Ingredients First: “The latest announcement regarding the introduction of new fixed charges on imports of fresh produce and plants is yet another blow to the already fragile fresh produce sector which has already been hit by so many additional costs and challenges due to the post-Brexit border control plans.”
Implications for ports and businesses
Under the new scheme, a “common user charge” will be applied to commercial imports, including animal products, plants and plant products passing via the port of Dover in England and the Eurotunnel.
“What is particularly frustrating is that the fee is being levied for all fresh produce/plant goods passing through Dover or Folkestone – even if they don’t pass through the government controlled inspection post at Sevington,” says Parr.
The fees, organized per type of goods or “commodity line,” entail individual products incurring charges of up to £29 (US$36.69). This impacts goods spanning low, medium and high-risk categories.
“Although fees are capped, this is another expense for importers and retailers to bear, which will of course be reflected in further delays at the ports and another price hike for essential food items.”
In an official statement shared with us, Cold Chain Federation chief executive Phil Pluck says: “It is extremely disappointing that the Government announced the charges at the last minute, leaving affected businesses little time to revise their commercial arrangements with EU customers.”
“Our main concern is that this is now certain to negatively affect food prices. The confirmation that common user charges will apply from April 30, means that UK importers of medium and high-risk goods will have to pass this cost onto either the EU importer, the smaller UK retailer or the UK consumer.”
Navigating challenges
The government has positioned the fees to safeguard the country’s biosecurity by preventing the import of diseases. The government also claims the fees will pay for “world-class border facilities.”
The implementation of new checks could lead to the damage and destruction of fruit and vegetables.This rule change follows multiple delays in implementing these changes, attributed to providing businesses additional preparation time and minimizing supply chain disruptions.
However, they say that for businesses throughout the supply chain, the fee is not helpful to the interests of UK-based importers or the wider EU supply chain.
“It reinforces the government’s slapdash approach to a vital part of UK PLC. EU exporters are also shouldering the additional cost of health certificates, which may discourage many from exporting food and plant products to the UK in the future,” elaborates Pluck.
Earlier this year, in a statement shared with Food Ingredients First, the National Farmers Union sounded the alarm over these policy changes, warning of potential disruptions to the import of young plants crucial for the upcoming planting season.
The Institute of Export & International Trade also voiced concern regarding the recent border control changes. He emphasized the lack of communication amid preparations for significant modernization at the UK border, indicating a concerning trend.
Concerns over post-Brexit policies
Last month, the British Retail Consortium revealed that consumer price inflation figures in the UK suggest a decline in food inflation. However, new details have emerged from the update that may lead to higher prices for F&B products.
“Ultimately, this will increase business costs and food prices and potentially lower choices for the shopper,” says Pluck.
“Not for EU” labels on commercial F&B products represent yet another post-Brexit policy. Businesses are increasingly concerned about the potential escalation of trading complexities and costs.
According to the Food and Drink Federation, these added expenses, coupled with manufacturers already absorbing input cost inflation, are expected to drive up food and drink prices for consumers across the UK, further burdening already stretched households.
By Sichong Wang
