Amazingly, there are still folk around Britain who have failed to grasp the meaning of the words”third country”, let alone why it matters. The Centre for Inclusive Trade reports a 16% drop in British food exports to the EU and is calling for concessions that would be unfair to other third countries. There isn’t a cat in hell’s chance of the European Commission doing a special deal for a former member state that opted to become a third country.
The workload of maintaining post-Brexit trade with the UK is such that every day six people are diverted to troubleshooting red tape and overcoming administrative inertia for a major meat importer. This resource is additional to the routine business of managing a presence on the UK market in previous years. All around Europe, food companies are reconsidering the cost of shipping product to the UK. A number of Spanish pigmeat traders are already starting to throw in the towel on the British market and sell to Germany instead. The reasoning is clear: they know that their lorries will no longer face unpredictable treatment on arrival in customs sheds.
The Scandinavians have been selling food to the UK since the 1870s and the Danish meat sector is as firmly embedded in the UK economy as it has ever been. It operates on a scale that allows it to ship a high proportion of full loads, making it something of a rarity among the UK’s food suppliers, many of whom are seriously questioning the increased costs of a “world class” operating model.
This is not new, but for a few brief moments the British political climate might just let a few sparks of fresh thinking to take hold. It all depends on the extent to which the underlying structures of the UK’s food imports have been broken. Starting where we left off with the Brexit border tax, there is a short window during which some damage limitation might be implemented.
Top of the list of policy changes to make would be to improve the treatment of lorry drivers coming to the UK. Another objective that should be high on the list is a greater level of care and attentionrrdrþ when handling fragile goods. Fragile shipments of young plants have been refused by retailers, who operate in a very time sensitive market. The horticultural sector has been disproportionately hit by hamfisted inspection teams.
Defensive to the last, DEFRA has come out fighting and is accusing importers of deliberately making mistakes in the data entered into consignment details. For instance, there are six primary classifications for rice, a common component in ready meals. How complicated can DEFRA make it to identify the rice used in a ready meal, then? Well, the guidance for six customs codes topped 680 words and the text fills a sheet of A3 when reduced to 7.5 point. It details the rice varieties to be found. While quite interesting, it assumes knowledge and experience that is quite rarified. Oh, and you’ll need to bring your own standardised system to measure rice grains. In fact, it would be a useful addition.
This is not the first time that the deliberate destruction of the British economy by the departing government has been discussed on this site, but we are in the final hours during which a national fiscal fiasco stands any chance of being resolved with any form of access to the original planning documents. It may well be that the origins of the UK’s stealth tax on food imports have already been shared with a shredder and the perpetrators will never be identifiable. Nor is there any guarantee that this would go any way towards clearing up one of the messiest episodes in British history. In the years since Britain left the European Union, it did not get round to establishing an integrated system for imports for years. Here is what DEFRA said in 2023: “Currently, imports from the EU and certain imports from Greenland, Faroe Islands and EFTA countries do not need to enter Great Britain via a BCP and are not subject to veterinary checks at the border.” (Source: http://apha.defra.gov.uk/documents/bip/iin/vcap.pdf)
Just two months later, and Britain is rolling out its three-phase Border Target Operating Model (BTOM). (The label ‘world-beating’ is optional.) Lorry drivers arriving in Britain have not been impressed by the service standards they have encountered on the ground (https://urbanfoodchains.uk/sevington-gives-cause-for-concern/), which is more of a hostile environment than a workplace.
It is time for the British government to get its borders in order, implementing the Border Transfer (BTMO) and charging a border tax called the Common User Charge. This month, importers will receive their first invoices for Common User Charge (CUC), a sneaky way of removing nasty swellings from collective wallets. Importers of animal and plant products that would usually be considered for food safety checks can expect to pay over the odds for driving a lorry off a ferry at Dover to join the UK road network. Hauliers booking a DFDS one-way ticket online to Dover pay three pounds for this indispensable service, while lorries carrying grouped consignments of SPS foods face open-ended bills in the hundreds or low thousands for the same access. The simple explanation is that Britain is playing catch-up: the European Union had everything in place to trade with the UK as a third country the minute it ceased to be a member state. Britain was convinced that it would somehow avoid third-country status by negotiating a favoured nation package. There was not even a sketchy idea of what a post-Brexit customs system might look like. The years passed, conveniently putting off the awkward moment when Brexit would be complete.
DEFRA has gone from absentee administrator to nitpicking zealot overnight and is chafing over the accuracy of form-filling, notably for consignment detail on Export Health Certificates (EHC). Hang on to your hats, here is a sample:
“Continuous and/or deliberate non-compliance
It has come to our attention, that some traders and logistics companies are making continuous and/or deliberate errors including:
mis-declaring goods as low risk when they are medium;
or as medium when they are high;
not including a relevant Export Health Certificate (EHC) or Phytosanitary certificate.”
Or the consequences… :
Continued non-compliance within either the EHC or the CHED is not acceptable and will not be tolerated by Port Health Authorities (PHAs). Deliberate misdeclaration is a criminal offence. PHAs will be actively looking to identify such behaviour.
Where there is repeated non-compliance or evidence of misdeclarations, the appropriate authority will take statutory action. This will result in goods being held at a Border Control Post (BCP) for a physical inspection, which may lead to the consignment being ultimately returned or destroyed at cost to the person responsible for the load.”
Entering a conversation with a tone like that is doomed to become a monologue. Enough said.
There are no redeeming features of the purpose-built customs inspection facility close to the Eurotunnel terminal. Sevington will be remembered for its brutally sparse amenities, more an abandoned building site rather than a conduit of international trade. Even though the British taxpayer poured at least 120 million pounds into the place, there is no way that any of it went into amenities for lorry drivers, such as a food outlet for those kept on site for a day or more. An Italian driver was given directions for a MacDonalds takeaway more than a mile away, when he asked about catering arrangements during a 55-hour wait. Water is available for lorry drivers, but neither tea nor the continental working beverage of choice, coffee, is anywhere to be seen.
The purpose of the visit is food inspection, but Sevingdon has a growing catalogue of problems. There are no guarantees that having waited four hours or more to have goods inspected the goods will still be saleable at the end of the process. There is no way that HMRC will take any form of liability for breakages and rough handling of fragile goods, particularly plants. Retailers are refusing damaged consignments, in one case estimated at EUR 40,000 (GBP 37,700).
Over the past six weeks since the second phase of BTOM, 2,500 Dutch lorries have travelled to the UK, with 125 being “turned out” in HMRC slang. The Dutch haulage industry body Transport en Logistiek Nederland (TLN), remains supportive of Britain’s BTOM plan, with a polite but firm report outlining the Dutch hauliers’ reservations with the status quo, making tactful suggestions for improvements. At this point it should be made clear that while most people would assume that the Border Transfer Operating Model is an administrative framework to manage the flow of goods efficiently. There is a more sinister, or cynical view that runs through the British establishment from its very origin. Had the government spent £120 million or more on a state of the art logistical platform, eyebrows might have been raised. But spending on that scale to create an environment that brutalises all those who come into contact with it and pitilessly crushes any possible interest in wanting to move to Britain was fine. Publishing under his pen name George Orwell, journalist Eric Blair captured this elusive maverick mindset writing under the setting sun of a crumbling empire. Orwell’s accounts of such incidents as the shooting of a working elephant juxtaposes the credentials of the imperialist administrators and the lives of those they exploited. Only we wouldn’t say exploited if we could get out of it: Orwell saw to it that we can’t.
What today’s generation of administrators is doing would make sense to a commentator like Orwell. He would understand the previous government’s obsession with small boats: the symbolism of inbound asylum seekers; the fear and loathing of exotic languages; the lingering smell of spices that grow in crowded corners which are ill-suited to mechanised agriculture. These are the roots of racism and prejudice, tinged with guilt for the massacres that were carried out in the name of civilisation. We must first slay the ghosts of oppression that our ancestors pretended to ignore, hardening their hearts and blocking their ears the while.
It is against this backdrop that we need to look at the operational shortcomings of BTOM. Start with the inspection processes and the sketchy way they operate. EU sampling rates, for instance, would normally start at 100% for new third country businesses (Brexit assumes tabla rasa.) easing off over a period of time to, say, 35% after a year so of solid compliance. Sevington is sampling 5% at most, and struggling with it. There is no way a long term target of 100% could be achieved, nor would it serve any useful purpose once compliance levels have been established. TNL is concerned by wide variations in prices for testing at privately-owned facilities, citing fees ranging from £300 to £750, with additional surcharges for weekends and bank holidays. This leads to uncertainty for costings, resulting in financial losses and operational constraints. What is more, any non-food consignments that are travelling on the same trailer as food products selected for testing face an average surcharge of £13. Go figure.There are also issues with the flow and quality of information coming back from BCP. The Dutch hauliers urged the British authorities to communicate in real time, since saving messages sent as an overnight email is not a lot of help in the real world. Likewise, linking the Common Health Entry Document for Plants and Plant Products (CHED-PP) with the Goods Movement Reference number (GMR) would make it easier to identify consignments that will undergo testing later on. As for handling standards, TNL was scathing. Not least because HMRC does not take any liability for damage caused during product checks. The Dutch hauliers would like to see staff trained to a higher standard and suggest that drivers would be well-qualified to advise on reloading fragile plants after inspection. While on the subject of drivers, none of them took on the job to spend hours in a sensory deprivation decor, often for hours on end. They are routinely barred from leaving the site or are required to surrender the keys to their vehicles as a condition of going outside for a breath of fresh air. TNL is receiving calls from members who have lost money due to rough handling of fragile goods. There have also been cases of inspectors not turning up or being taken off one inspection to attend another. The lack of any form of product liability on the HMRC inspectors is a recurring theme, but the tone of the TNL assessment is constructive and polite, as the industry body offers to help to resolve some of the issues the HMRC faces. It has published a four-page report on the subject. Expect the temperature to rise in July, when the first batch of invoices go out for Common User Charge payments from April 30 onwards. There are suggestions that it will be tricky to match up consignments, locations and testing in a coherent narrative adding up to some serious money. Watch this space.
Dover port health staff carrying out food safety checks are being sidelined by DEFRA, which is telling importers that their goods should be routed through Sevington. Before shipping certain goods, importers must pre-register the shipment using a system called IPAFFS which is short for Import of Products, Animals, Food and Feed System. DEFRA is telling everyone to delete the Dover port code from the documentation and to change their IPAFFS point of entry to Sevington.
Staff at Dover have been carrying out SPS food safety checks for a decade, but they have never found themselves at loggerheads with DEFRA before. The root of the problem is the Border Operating Model (BTOM), which is not set up to manage product assessments requiring detailed knowledge and experience.
Assigning three levels of risk to food imports does not cover real life situations. Take High Risk Food Not Of Animal Origin HRFNAO, which is a detailed listing of food products that need to be checked for specific hazards. These can include central European blueberries, which are checked for radioactive Caesium 137 from Chernobyl; peanut products from north and south America, which are checked for aflatoxins; or US fishery products, for which processing hygiene standards vary widely.
There is a statutory compliance angle to these product checks, which are regulated by assimilated European laws. At this point they are beyond the remit of BTOM and DEFRA is not authorised to change their enforcement. So instead, the ministry has been advising importers to amend the IPAFFS entry from Dover to Sevington.
In the meantime, Dover port health staff continue to carry out the food safety checks that keep the nation’s food safe.
The UK has depended on imported foods and ingredients for centuries. The market mechanisms which make this possible are under attack – from the British government.
At the end of April, it started charging a levy on certain food imports. Called the Common User Charge (CUC), it is currently applied to a number of plant and animal products which are subject to Sanitary and Phytosanitary (SPS) checks. The supposed aim of the levy is to pay for wear and tear to the UK’s port facilities arising from HGV traffic. It is not being collected to pay off capital expenditure. Whether intentionally or not, the Common User Charge could destroy key sectors of the British economy.
Projections of its likely cost to importers have risen steadily as civil servants have got a better understanding of how consignments are documented. The Common User Charge was first calculated as a one-off levy, taking the top five consignment lines from a single Common Health Entry Document (CHED). There can be more than one CHED for a consignment: they list commodity codes and the risk status of the goods in the consignment. Low risk products and goods in transit (to Ireland) are charged at £10 per consignment line, which rises to £29 for medium and high risk products.
When it became clear that a consignment can have more than one CHED those drafting the rules worked out that they were missing a trick. From an initial assurance that a common user charge would be capped at £145 and based on a single CHED, they became complex calculations across multiple CHEDs, totalling several hundreds to a thousand or two thousand pounds.
Importers of food to the UK using Dover could end up paying twice. Until recently, food safety testing was routinely carried out on products arriving in Dover. Now, drivers with consignments of animal or plant products that require SPS testing will be instructed to take their lorries to an Inland Border Facility at Sevington, 22 miles away, where a further Common User Charge will be due. The site also serves the nearby Eurotunnel terminal at Ashford.
Compare this to a basic ferry ticket for a lorry, like the DFDS cross-channel Spot ticket, which sells online for less than £300, of which six pounds go to the ports at either end of the trip, covering wear and tear on the roadways as well as port maintenance. The Common User Charge is 48 times more than the modest sum charged by a commercial shipping line. Dover port is owned by the town, thanks to a royal warrant issued by James I in 1604, meaning that the state has no stake in the country’s largest port. Not that this has stopped it from milking Dover like a cash cow. For a number of reasons, Sevington has been pushed for SPS testing by the Department for Transport, which has been responsible for the site since it opened.
When the question of double charging was raised, the response was unequivocal. “You will be charged the CUC regardless of whether the lorry is called for inspection or not, along with the Ashford Port Health Authority relevant charges,” (sic) a spokesperson for Dover port declared. The idea that treating the world with contempt might be inappropriate seemed to be irrelevant. Not sure that the two halves of the answer were in response to the same question, either.
Urban Food Chains understands that importers are unable to access any billing or account information relating to the first Common User Charge bills. On April 16 and 25, HMRC updated its guidance, explaining that the first CUC invoices would not be sent until 12 weeks after April 30, the date the CUC came into effect. After July 30, invoices will be monthly in arrears. There are no plans to include any consignment detail that would help businesses to identify the shipments.
The new system risks creating a hostile environment (see this post) for hauliers and importers alike. This would reduce both the availability of goods and drivers to move them, as well as pushing up prices.
These are strange times. There are things going on that beggar belief and defy reason. Since leaving the single market, the UK has been developing an administrative structure to manage the country’s imported goods, the Border Target Operating Model (BTOM). There is no way that BTOM can be described as Brussels red tape. It has been drafted and implemented by the British government. So why is the British government taxing food imports of plant and animal products? Last week, the story was that importers would be charged for the running costs of Border Control Posts. This would be no more than GBP145 per lorry, we were told.
It appears that we were told wrong
When a haulier buys a ticket from Calais to Dover, the price now covers the journey as far as the outboard end of the loading ramp at Dover. From the dock to the UK road network, the price is dependent on what the lorries are carrying and how the paperwork is organised. For a single consignment load of any thing other than plant or animal products that qualify for SPS (Sanitary or PhytoSanitary Checks), the road is clear. For those carrying goods that do qualify for SPS tests, they will be charged Common User Charge (CUC), regardless of whether or not they are held for inspection. This is billed separately at GBP10 or GBP29, per consignment line, up to a maximum of five lines per Community Health Export Declaration (CHED). Inspections have always been charged separately and in addition to any other costs.
About two thirds of freight shipments coming into Britain share trailer space between a number of companies, who effectively go Dutch to spread the shipping costs of small and often varied consignments. Known as groupage, it used to be an economical way of managing transport costs. However, It would appear that there is no upper limit for the Common User Charge. Trade bodies are warning that shipments could generate CUC bills of up to GBP2000 for a single trip. This is a completely new randomised body blow for the logistics industry,.
After three years’ of false starts for carrying out routine safety checks on food imports, 2024 has seen two of the three phases of BTOM rolled out. The BBC spoke to wholesale florist John Davidson, who has seen around GBP 200,000 added to the annual cost of running his business, literally overnight. Talking of overnight, there is talk of closing government-run BCPs at 7.30 in the evening: for anyone in logistics, this is unthinkable. Anyone who has ever driven on the country’s long distance network will be aware that delivery vehicles are at their busiest in the small hours of the morning, as are the wholesale markets.
The measures announced last Tuesday (April 30) will send countless SMEs to the wall, whether or not they import food, just because the economy is being ripped apart. Not slowly, but in a confrontational manner. Passive aggressive is not a contradiction in terms, but a symptom of deep-seated anger.
A wall of silence still surrounds the computer system at the heart of the BTOM, called the Single Trade Window (STW). This will be the one and only way of getting data into the system. The final version*1 of the BTOM guide, published on February 11 states: “ …the Single Trade Window could be fully operational in 2027.”
There are a number of reasons why this could be awkward, but one will do. The STW calculates the aggregate cost of wear and tear caused by lorry traffic to roadways at ports. This operational detail is used to set a levy called the Common User Charge (CUC). This is payable when a lorry leaves a port: the CUC is added to a rolling monthly invoice. While the STW sets a figure for Government operated ports, private operators were invited to fix their own charges, as they would do for anything else. Dover and Portsmouth, the two busiest ports in the UK, both happen to be owned and operated privately.
Sorry, but this is not a clickable link yet. 1 Feb-11-24-Final_Border_Target_Operating_Model.pdf para 350 page 88
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.
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