Industry trade

New Year’s Brexit Changes ‘Permanently Damaging’ EU Trade, Food Organization Says | Brexit

Small UK businesses should expect trade with the EU to be ‘permanently damaged’ from January 1, the refrigerated supply chain trade body said, after new ones came into effect. customs controls which, he said, will make imports from the bloc “more expensive, less flexible and much slower”.

Amid growing public dismay at the negative impact of Brexit, the Cold Chain Federation said specialty food imports could face the same 70% drop that has affected food exports by small businesses this year after Britain left the EU’s single market and customs union.

Additional costs of £ 300-400 for each shipment will mean food sales to EU countries in small batches could become unprofitable, said CCF, which is lobbying on behalf of companies that transport frozen and refrigerated products.

“The big victim of these trade barriers is the company that has to import small and frequent quantities across borders – a palette of specialty cheeses or cans of onion powder. This is the kind of business that will suffer, ”said Shane Brennan, general manager of the federation.

Business groups have called on the government to relax its stance in negotiations with the EU to avoid a collapse in trade with the 27-member bloc. But while ministers agreed to extend the deadline for veterinary checks on food crossing the border, there has been little progress in reducing bureaucracy.

Mike Cherry, president of the Federation of Small Businesses, said a survey carried out in the fall showed only a quarter of companies were ready to introduce full import controls.

“We have no indication that the level of readiness has improved, especially since the holiday season has been so disrupted again,” he said, adding that a small business in five who do business internationally had given up selling to their customers. in the EU since the end of the transition period on exports.

Rising food prices have played a significant role in rising inflation over the past six months, and economists fear that rising import fees will push prices further, forcing the Bank to England to raise interest rates faster than expected.

The consumer price index hit 5.2% in November and is expected to exceed 6% in the spring, as rising food import costs and rising gas prices drive up the cost of living .

This week, Simon Spurrell, co-founder of the Cheshire Cheese Company, said the hard Brexit pushed by Boris Johnson was the “biggest disaster a government has ever negotiated in the history of trade negotiations.” Cheese makers are among the sub-sectors of the agro-food industry hardest hit by the new trade barriers.

UK food and drink exports to the EU fell 24% in the first nine months of 2021, according to figures from the Food and Drink Federation, which said the crisis had helped push exports down sector of £ 2.7 billion between January and September compared to pre-pandemic levels.

Brennan said exports that occupy only a fraction of a container suffered the most from additional customs controls on exports, and that this was likely to be repeated when the controls also applied to imports.

He said importers should follow safety rules, provide customer declarations and have the necessary documents to ensure goods pass through ports. “And all of that has to be in sync to keep things from getting even slower,” he said.

Cherry said, “Unless the government steps in with more support, the situation is likely to get worse. “

The Institute of Directors said its Economic Confidence Index fell from -6 in November to -17 this month, a sign of nervousness among business leaders over the UK’s economic outlook.

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He said three-quarters of business managers expected costs to increase over the next 12 months, and most said they would increase prices to fully or partially offset the increased costs.

The Trade Union Congress has said new controls on goods entering the UK will undermine the UK’s position as a major trading nation and the drive to create well-paying jobs.

TUC General Secretary Frances O’Grady said: ‘With goods entering the UK facing new red tape, we could see further chaos in the supply chain, which could affect jobs. in the affected sectors. The government must invest in the infrastructure and the jobs we need now to avoid further disruption. “