How new Brexit rule change will drive up food prices

Prices on some fruit and veg items are expected to rise this year after a Brexit rule change.

By Lewis Denison, Westminster Producer

Britons will have noticed food prices rising significantly over the last year's cost-of-living crisis but a new rule change on imports following Brexit could be about to make things even worse for consumers.

The UK has delayed border checks on goods coming from Europe five times since leaving the EU, but new rules will gradually start to be implemented from January 31 and they will soon start to drive up costs on certain foods.

Nearly half of what we eat in the UK comes from abroad and nearly two-thirds of that comes from the EU, meaning a massive proportion of foodstuff on sale in the UK is likely to get more expensive.

What rules are changing and when?

  • From now: New paperwork for EU businesses sending animal and plant products to the UK will be required from January 31

Health certificates will only be required for medium and high risk foods, many of which are already produced in the UK.

High risk items include live animals and eggs for hatching. Things like milk, cheese, fish and meat are classed as medium risk.

  • April: Physical sanitary and phytosanitary (SPS) checks will be carried out on these goods from April 30

Prior to this, most items entering the UK from the EU have not required physical checks.

Once the paperwork is done, the HGVs may be selected for inspection at Border Control while en route to the UK.

Even if the produce is not diverted for inspection, a “Common User Charge” (entry charge) will be levied.

  • October: The new import system will be in place and several items will change from low to medium risk from October 31

The government hopes the new import system, officially known as the Border Target Operating Model, will be in place from the end of October and paperwork will be required for all food items, not just those which are medium and high risk.

And the number of items requiring physical checks will increase dramatically after an unexpected change from the Department for Food and Rural Affairs (DEFRA).

On Thursday, Defra said many fruit and vegetable consignments from the EU will move from low risk to medium risk on October 31.

A government source said traders will get a minimum of 3 months’ notice to prepare for any changes.

Which items will become more expensive?

The unexpected changes announced by Defra will apply to popular items such as peaches, strawberries, apples, peaches, pears, tomatoes, blueberries, grapes, and some vegetables such as sweet potatoes and carrots.

According to the FPC, the reclassification of fruit and vegetables means the “vast majority” of consignments from the EU will require extra paperwork.

The Institute of Export & International Trade said communication about these changes has been an issue for small and medium businesses and it will likely cause price increases.

Director General Marco Forgione said: "The way these changes have been handled is concerning.

"At a time when business is preparing for the most significant modernisation of the U.K. border in several generations the lack of communication on this reclassification of fruit and vegetable products is not very encouraging.

"This reclassification means that unexpectedly a range of fruit and vegetables are now subject to new processes and administrative requirements."

He added: "There is a risk that these changes and the way information has been shared could result in additional costs for the exporter, the importer and ultimately the consumer.”

Where will prices rise and how much by?

The Fresh Produce Consortium (FPC) says the decision to reclassify a number of items as medium risk will add £200 million to the cost of imports. 

“These increased costs will apply in October and be passed straight on to consumers,” Nigel Jenney, CEO of the FPC, told ITV News “and they are a threat to the viability of numerous small businesses”.

The entry charge on loads subject to checks is estimated to be between £20 - £43 per lorry but the government has yet to confirm the precise details of the fee and how it will be applied.

As it stands, the FPC says 65% of the lorries which arrive in the UK carry mixed loads of goods and they are more likely to be inspected, meaning potential delays for smaller importers who find their goods affected.

It is not yet clear exactly how much prices will rise by but they are expected to increase in a number of smaller businesses.

Steve Cock, a director at independent customs broker The Customs House Ltd, said requiring paperwork for fruit and veg from the EU is "utter madness".

“Whilst this will not add significantly to the costs associated with moving a lorryload of a single product to a supermarket, it will be highly inflationary for businesses that move smaller often mixed consignments,” he added.

Businesses which will be hardest hit, according to the FPC, will include local wholesalers who provide food to cafes, restaurants, hotels, schools and hospitals.

The government has also not denied food prices are likely to increase after the October changes take effect.

Government sources however have suggested to ITV News that the impact would be negligible, as little as 0.2% over three years.

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What are the benefits of the changes?

The Institute of Export & International Trade says the changes will protect the UK’s environment and farming industries.

It says the required certificates will eventually be digitised, improving efficiency reducing costs for exporters.

Businesses that regularly transport goods to the UK can be granted ‘trusted trader’ status which will mean they are subject to fewer checks.

It is also claimed the changes will improve the flow of goods from England, Wales and Scotland to Northern Ireland.

A government spokesperson said: “We are committed to delivering the most advanced border in the world.

"The Border Target Operating Model is key to delivering this, protecting the UK’s biosecurity.

“We have introduced these import controls to support businesses and ensure the efficient trade of fruit and vegetables is maintained between the EU and Great Britain.

"We are taking a phased approach – including temporarily moving all medium risk goods from EU, such as fruit and vegetables, to low risk to ensure business do not face any unnecessary burdens. We will continue to work closely with businesses across the UK as the controls are implemented.”

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