Borderline…

There are a number of things that have passed without comment in recent weeks. Take the UK’s obsession with purging any links to anything that might once have been described as European. What is dismissed as European “red tape” has often proved to be a prerequisite for things to function, such as drive-through border crossings within the EU for instance. Member state borders are still readily identifiable and present, but mostly peaceful. There are still a few central European neighbours, who are still caught up in long-running historical processes spanning generations and not amenable to swifter solutions.

Food imports set for price hike

After a couple of years of waving through EU imports of meat and animal products with no dockside checks, the UK government is about to apply a sharp twist to food pricing this year. It will start charging businesses a fixed charge on all shipments passing through government-run Border Control Posts. Referred to as the Common User Charge (CUC), it was put out for consultation over three weeks in July last year. While the CUC will be a single fixed payment, there are uncertainties over inspection charges for food shipments that would be billed by BCP operators*. These can total hundreds of pounds for a large container.

On January 31 2024, DEFRA brought into force a number of measures for each of the three risk categories (https://www.gov.uk/government/publications/border-target-operating-model-information-leaflets-for-businesses/technical-questions-and-answers-about-sanitary-and-phytosanitary-controls-sps#risking-approach).

These are as follows

From 31 January 2024, DEFRA has introduced:

  • health certification on imports from the EU and European Free Trade Association (EFTA) of medium risk animal products and the introduction of health certification on imports from the EU, Lichtenstein and Switzerland of medium risk plants and plant products
  • health certification on imports from the EU and EFTA of high-risk food and feed of non-animal origin
  • import pre-notification and health certification when moving EU and EFTA animal products or EU, Switzerland and Lichtenstein plant products from the island of Ireland, to align with the rest of the EU (for example, any goods other than qualifying Northern Irish goods from Irish ports directly to Great Britain)

As of April 24,

From 30 April 2024, DEFRA will be adding:

  • the introduction of documentary and risk-based identity and physical checks on medium risk animal products, plants, plant products and high-risk food and feed of non-animal origin from the EU
  • existing inspections of high risk plants and plant products from the EU will move from destination to Border Control Posts
  • beginning to simplify imports from non-EU countries – this will include the removal of health certification and routine checks on low risk animal products, plants, plant products from non-EU countries as well as reduction in physical and identity check levels on medium-risk animal products from non-EU countries

What will DEFRA deliver?

2.1 How are checks within a port or airport’s perimeter organised, and who does what and has accountability to make it happen?

Within the curtilage of a sea or airport, the port operator will direct the movement of consignments. At the Border control post (BCP), APHA will undertake checks on live animals, or plants and their products.  The Port Health Authority/Local Authority will undertake checks on animal products and High-Risk Feed or Food Not of Animal Origin (HRFNAO). The port operator will not release a consignment from the port until they have been informed that it has been cleared by the relevant inspection authority.

2.2 Will BCPs be ready? Do they have sufficient capacity?

Defra is confident that existing and new BCP infrastructure will have sufficient capacity and capability to handle the volume of expected checks outlined in the BTOM, with robust, dynamic, and effective operational measures ready to call upon if needed. Defra will continue to work with existing BCP operators to ensure they are prepared, and the Government has built new infrastructure at critical locations. Operators have not expressed concerns regarding under-capacity, we are therefore not anticipating queues but will continue working closely with operators to address any concerns they may have.

Looking ahead…

Where previously we traded as equals with EU member states, we now have to fit in with the 30 or so national legal systems that we used to navigate seamlessly as an EU member state. Significant changes since becoming a third country include an obligation to use solid wood and premium grade packaging materials for shipping goods. In the weeks leading up to Christmas, the cost of solid wood and other materials required by shippers of third country importers went up by 4%. Previous, less costly options, are no longer available since becoming a third country.

  • Dover is a particularly complex administrative structure, run by a trust granted à royal warrant by James 1 in1606. The modern Dover east dock facilities were built on reclaimed land. It is operated on behalf of the people of Dover by the district council. DEFRA is trying to reclaim funding for food safety checks since 2022. The department argues that the disputed three million pounds should be recovered from the owners of illicit pigmeat that is uncovered by customs searches. Dover District Council does not think much of this ill-considered non-answer to its problem.

What next?

Britain’s busiest ferry port faces the risk of bankruptcy following Westminster’s decision to retract millions of pounds in funding for swine fever checks on pigs arriving at the port of Dover. The money has already been spent during the financial years for which it was allocated. The local council meets tonight (Monday February 5) to plan for the coming months, when food testing will be rolled out further.

A third of Dover District Council’s budget is diverted from local government to funding food safety checks at the UK’s largest passenger and freight terminal. In June, this figure will rise to nearly half. Dover handles up to 120 ship movements a day at peak periods and moves a third of the UK’s food imports.

The harbour is run by an independent trust, set up by an act of parliament and given the task of managing the busiest ferry port in the UK. Since the legal requirements are set by national laws, Dover has no choice but to comply. The district council is run by a Labour group with a majority of one elected in May last year. The harbour’s independent status means that theoretically it can set whatever prices it needs for its services to pay their way. The reality is not that simple

The real retail equation

https://www.channel5.com/show/aldi-vs-lidl-supermarket-wars

This evening I watched the Channel 5 documentary Aldi vs Lidl: Supermarket Wars. The program makers correctly identified the standard set of superficial differences that are plain for all to see. However, while setting out to explain the yawning gap between UK and Continental business models, the detail was a bit sparse. For instance, consumer journalist Harry Wallop does his bit to keep alive the 1966 World Cup mindset, evoking a long departed anachronism rather than twenty first century marketing.

The programme’s narrative starts in the 1990s and portrays the discounters as eccentric oddballs with a business model that worked in Germany but needed tweaking for more lavish UK mindsets. British food retailers had established a stranglehold on the postwar consumer economy and raked off substantial sums of cash from suppliers, known as shelf money, hello money, listing fees, the list was endless. Large retail businesses expected to be paid GBP 5,000 a year per Stock Keeping Unit (SKU) to be listed at 200-300 stores. Example: food manufacturer presents a family of six snack products in the early 1990s and would be asked to stump up thirty thousand quid for listings in up to 300 stores. Any subsequent special offers were funded by suppliers, in the form of free product (physical stock); or credit notes or deductions from existing/current invoices.

Given that even a modest hypermarket would stock 25,000 to 30,000 SKUs in those days, the retailers were making lorryloads of money while pretending to be church mice earning a miserable 4% profit on return. The arrival of the German discounters threatened to blow their cover and the major multiples were not keen on this. The reason Aldi and Lidl could run rings round the big four within a few years of arriving was that the discounters only ever discussed prices with suppliers and never asked for shelf money. Carving out a substantial market presence without constantly squeezing suppliers, the discounters have demonstrated that it can be done and done honestly. That spooked the multiples even more.

Footnote: At the time of writing, continental retailer Carrefour is playing the commercial equivalent of Russian roulette with snacks and soda giant Pepsico. Initially limited to France, Carrefour stores across Germany, Italy and Spain are now all locked in to a life and death fight over trading terms (shelf money). Even if Carrefour dumps Pepsico (unlikely) there is no way that the tonnages of product could be secured from other manufacturers. Also in France, the eponymous independents’ chain E Leclerc is reading the riot act to its suppliers. Running a tighter ship than BlueBeard, second generation chief executive Michel-Edouard is threatening hellfire and brimstone for all those who challenge his figures. For years now, the group has only ever paid for one tonne of potatoes out of every 1.2 tonnes delivered, insisting that there is a lot of slack (waste) with this crop. This is simply not true: any fresh produce department anywhere in Europe that is experiencing more than 2.5% slack across a week would be hauled over the coals.

245% duty shock for UK cheese

British cheese exports to Canada will face duty of 245% next year, once the third country duty-free quota is exhausted. Some 95% of this quota is already taken by products arriving from Norway and Switzerland, leaving very little for shipments to any other third country.

This slap in the face for British cheesemakers comes as Canadian negotiators came amid talks on the implementation of the much-vaunted bilateral trade deal. Refusing to roll over previous extensions to zero percent duty available under former EU terms, the so-called cheese letters, the decision vapourises pre-Brexit claims of extensive growth in UK food exports. These will in fact be treated like any other third country products, in the absence from specific terms agreed during the framework negotiations. Last year, the UK exported cheese worth nearly GBP 19 million to Canada.

Growing concern

Hundreds of acres of cultivable farmland will be cleared to make way for houses as far as the eye can see. In the coming months, Mid Sussex District Council will hear applications from developers wanting to build 1500 houses between the villages of Ansty and Cuckfield. As well as residential properties, there will be shops and amenities in addition to a headline-grabbing 30% allocation of social housing. Whether or not the developments will ever release as much as 30% for social housing remains to be seen, but it needs to be there at the outset..

This major development plan faces problems, however. To begin with the new homes will generate additional demand for water in a part of the world where demand for water is already comparabl;e to desert regions.The loss of 250 acres of farmland is nothing short of disastrous: the UK cannot afford to throw away productive land.

Global factors keep pushing up UK food prices

Over the past two years, climate change and rising energy costs have been the two biggest sources of food price rises. Analysis by The Energy and Climate Intelligence Unit (ECIU) suggests that even if energy costs ease, climate change will carry on pushing up food prices in years to come. With hundreds of acres of UK farmland covered with floodwater as I write, the water levels will lead to lost crops, forcing farmers to write off produce that would otherwise have counted towards the UK’s economic activity. Replacements will be required for the lost stock, which may need to be imported,

Climate change cost UK consumers an extra GBP 171 in 2022, rising to GBP 192 this year. While the ECIU expects energy price rise to ease in years to come, the think tank still reckons that households have had to find just over GBP 600 for environment-related price drivers in 2022 and 2023. Dr Tim Lloyd, at Bournemouth University, argues that energy pricing is behind 59% of all UK food price rises. All over the world, drought and heatwaves are affecting basic commodities such as olive oil, canned tomatoes, sugar and rice. Food prices are rising everywhere: this is inevitable, given the way food is traded.

Fast forward to 2024 and UK voters go to the polls. Next year, six years later than promised, the UK government is promising to phase in the plant and animal checks that were a part of the EU border control infrastructure. This inspection activity does not come cheap and will be added on to the cost of importing food. Just when consumers thought things were settling down, they can look forward to an unexpected surge in the cost of imported food.

Late, random and arbitrary

One of the most frequent arguments trotted out for Brexit was that it was time to take back control of international borders. The ‘take back control’ mantra was somehow an irrefutable justification when all else fails. It remains more of a fig leaf than a reasoned argument.

Having regained third country status to make this dream come true, the UK has obtusely dragged its feet over implementing the veterinary aspects of border control. The simple truth is that the commitments which come with international borders were not in fact a top priority for British politicians. There has been little political appetite to ensure full compliance with post-Brexit structures from day one, possibly because the necessary skill sets are in short supply.

The declaration of a 10km Temporary Control Area for blue tongue around a dairy farm in Kent came as a wake-up call the UK government. It was as if Westminster was caught out taking a calculated risk that there might not be any significant animal health issues. There may not be a serious risk of the notifiable disease spreading, the real problem is the political fallout from gaps in the UK’s veterinary provision under international animal health treaties.

This autumn has seen the implem entation of the first phase of the UK government’s Target Operating Model (TOM), marking greater reliance on digitised documentation and a move away from visual inspections. If all goes according to plan, the next twelve months will see the implementation of sanitary inspections by customs staff. The laboratory and testing fees will be charged to the owners of the goods concerned,. The additional costs will be significant but randomised. The testing will have an inflationary effect, but this will neither be directly attruibutable nor constant. It will b e impossible to predict reliably, but will generate resentment.

Coincidental good fortune

A recurring theme in Chris Packham’s series Earth is the timely coincidences that came with planetary events. Having just re-watched the third of the five part series, it is striking how the twin-track development of what later evolved into plants depended on some shared resources with what later became fungi. The proto-fungi extracted minerals from bare rock that nourished evolving plants, while the early plants gave glucose to their fungal partners. Without this quantum step in evolution, we would not exist today.

Unbearable pressure

Town dwellers in Japan have faced a rising tide of attacks from black bears, which are driven by a lack of food to venture into what were previously uncontested spaces. A story in The Guardian puts the number of casualties since April at 158 as well as two lost lives. Unlike the United States, where black bears are a constant risk for human misadventure, there is strong evidence to suggest that the bears are being driven by disruption to their normal food supplies rather than selecting centres of human activity as easy pickings for a quick meal.

A museum reconstruction of the Sankebetsu bear confrontation over a century ago. Pic: Wikimedia

Human fatalities arising from attacks by bears have figured in Japanese history for years. The museum reconstruction of the Sankebetsu episode on Hokkaido in the early twentieth century is pictured here. It came about after human incursions into virgin jungle. A conflict of interest with the formerly unchallenged top species was resolved on human terms. The current spate of bear attacks has broken a previous record high recorded in 2020, with many incidents being logged in Honshu, the largest island in Japan.

Unofficial estimates of Japan’s bear population range up at 44,000, nearly three times the 15,000 recorded officially in 2012. Without a corresponding increase in territory and food sources, there is no avoiding a state of constant conflict between species.