Less choice and higher prices? Britain braces for Brexit checks on food imports

Analysis by Hanna Ziady and Anna Cooban, CNN

London (CNN) — The United Kingdom does not feed itself, relying heavily on the European Union for fresh fruit and vegetables. That dependency has changed little since Britain left the bloc in 2020, and could now mean more pain for consumers and small businesses.

Tuesday marks the beginning of the long-delayed introduction of post-Brexit physical inspections of plant and animal imports from the EU. The spot checks will apply initially to products such as meat, cheese and some fish, and eventually to a range of vegetables and fruit.

Hefty new charges on some imported food products will also come into effect, threatening to reduce consumer choice and push up prices not long after UK food inflation fell from double-digit rates. The measures coincide with dire warnings about the possibility of price rises for bread and beer because of the impact of unprecedented rainfall on British grain harvests.

The new regime for food imports is perhaps the starkest example of the painful border bureaucracy that UK and EU businesses must contend with in the wake of Brexit.

Before leaving the EU, Britain enjoyed unencumbered access to the vast array of food produced in neighboring countries: cheese from France, peaches from Spain, artichokes from Italy. A steady stream of EU agricultural workers, meanwhile, was a boon to British farmers.

In the post-Brexit world, Britain’s food supply is more vulnerable to external shocks, even as related labor shortages have at times forced local farmers to leave crops rotting because of a lack of workers to harvest them.

UK industry groups say the additional red tape could mean thousands of pounds in extra costs each month for a typical business, while hold-ups at the border will reduce the shelf-life of perishable products and increase food waste.

Eddie Price, the director of the Birmingham Wholesale Market, which houses around 50 businesses selling meat, vegetables, fish, and flowers, says traders are worried about higher costs and delays at the border.

“There are concerns that (the food) will probably get held up at the point of entry for a couple of days and potentially reduce the value of the product and make it less available,” he told CNN. “There is a real concern, particularly among the larger importers, that it could add several percentage points to their costs.”

The UK government insists the new controls are crucial to ensure biosecurity and that checks will be phased in “in a sensible and controlled way,” with the focus initially on the “highest-risk goods,” a category that includes live animals.

“It is important to remember the cost of our border checks is negligible compared to the impact of a major disease outbreak on our economy and farmers,” a government spokesperson said earlier this month.

Higher prices and border delays

The government estimates the new checks will cost British businesses about £330 million ($419 million) annually and increase food inflation by about 0.2 percentage points over three years.

But the Cold Chain Federation, which represents businesses delivering goods that need chilled storage, has come up with a much larger sum. It calculates that the new border measures could easily add more than £1 billion ($1.3 billion) a year in costs to firms trading perishable produce, even before fruit and vegetables, which are likely to face fewer checks, are included.

An additional cost of that scale will “significantly increase food prices and reduce choice,” the federation’s CEO Phil Pluck wrote in a letter to environment and food minister Steve Barclay earlier this month.

“We also believe that this will seriously threaten the viability of small and medium-sized enterprises operating within food retail, such as small garden centres, restaurants, and delicatessens,” he added.

The British Retail Consortium, which represents major supermarkets among other retailers, is less concerned about the potential impact on food prices. Any additional cost from new checks and paperwork is “likely to be small relative to the £200 billion of food sales in the UK each year, meaning it is unlikely to result in any large price rises,” according to the organization’s director of food and sustainability Andrew Opie.

“However, it is vital that border checks run smoothly when they are introduced in April to avoid any risk of delays or availability issues,” he cautioned in a statement.

It won’t help that trucks arriving from the EU through the Port of Dover and the undersea Eurotunnel, which handle the majority of UK food imports, will be directed 22 miles (35 kilometers) inland for physical checks at a different facility.

‘Dangerous’ dependence

Around half of the food on British plates is imported, mainly from the EU — the Netherlands, France, Ireland and Germany are the biggest suppliers. Warmer Italy and Spain are also essential providers of fresh produce, particularly as UK shoppers are used to being able to buy virtually any type of food all year found.

In 2022, almost 40% of fresh vegetables consumed in the UK came from the EU, according to official figures. Some 53% was produced locally and the rest was imported from other countries.

When it comes to fruit, only 16% is produced domestically, with 28% sourced from the EU and 56% from the rest of the world.

This heavy reliance on food from other countries was thrown into the spotlight in February last year, when poor weather in Spain and North Africa caused shortages in Britain, leading supermarkets to impose purchase limits on some staple items, including tomatoes, peppers and cucumbers.

In an article in Nature published in June 2020, academics from the University of York in England argued that Britain is “dangerously dependent” on the Netherlands and Spain for the “lion’s share” of its fresh vegetable imports. “The degree to which this dependence can be sustained after Brexit is a moot point, to say the least,” they wrote.

But Jack Bobo, director of the Food Systems Institute at the University of Nottingham in England, says a reliance on imports doesn’t make a food system inherently more vulnerable. “There are risks either way,” he told CNN, pointing to disease outbreaks or extreme weather events that could wipe out local production.

“The Netherlands, Ireland, Germany and France… those are all major global food exporters,” he added. “It’s still going to be easier to ship to the UK than it is to any other global market.”

‘Crisis’ or opportunity for UK farmers?

Price at the Birmingham Wholesale Market says the new border charges give local suppliers the chance to offer more competitive prices than their EU counterparts. “This is hopefully an opportunity for the UK farmers,” he added.

The UK already uses about 70% of its land for agriculture, well above major EU agricultural producers, according to World Bank data. Still, experts say the country has scope to grow more of its own fresh produce, including apples, pears, tomatoes, peppers and cucumbers.

But here too Brexit hasn’t helped, ending as it did the free movement of EU workers on whom British farmers had relied for decades.

Seasonal worker visas were temporarily introduced to address this issue, allowing agricultural workers from the EU and elsewhere to work on UK farms for short periods. But with the program set to expire at the end of this year, many farmers are filled with trepidation over what comes next.

“No agricultural business knows whether they will have seasonal workers for 2025. That is rapidly approaching a crisis,” Tom Bradshaw, president of the National Farmers’ Union (NFU), told CNN. “You’re not going to invest in production for the long term if you don’t know about access to your workforce.”

Brexit has also spurred the UK government to agree free trade deals with Australia and New Zealand, handing countries with much larger and more cost-effective agricultural industries tariff-free access to British supermarket shelves.

“Since the 2016 referendum our political system has been in complete turmoil. Farming has been sold down the line and used as a bargaining chip in trade talks,” Philip Maddocks, the CEO of PDM Produce, a salad grower in the English county of Shropshire, said at a recent NFU Conference.

In addition to Brexit-related challenges, UK farmers have been squeezed by soaring input costs, including those of fertilizer, energy and labor. Supermarkets, a handful of which wield enormous power in Britain’s food supply chain, have often been unwilling to pay local producers more, opting instead for imports to keep their prices low.

In December, the government launched a review to “increase fairness” in the supply chain for fresh produce, which will probe contractual arrangements between UK producers and retailers.

“I’m not hugely in favor of subsidies, I’m in favor of fair food prices,” Maddocks said. “The government needs a strategy for food… that looks out at the next 20 years, not five or one, or even months, as has been the case in the past few years.”

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.