Small and medium-sized importers of food and plants from the EU will face punitive monthly charges running into tens of thousands of pounds when post-Brexit border checks come into force at the end of this month, industry bodies have warned.
Fees on EU goods arriving at Dover and Eurotunnel, which handle the bulk of UK food imports, have been capped at £145 per product type, but trade groups said in practice the charges would quickly add up, leaving smaller operators facing crippling cost levels.
The groups, including the British Chambers of Commerce, the Cold Chain Federation and the Horticultural Trades Association have urged the government to either delay the introduction of the charges on April 30, or do more to reduce the impact on small businesses.
They said the government had failed to take on board industry concerns when consulting over the operation of the new border. The Financial Times reported last week that a range of technical problems will mean many of the checks will not be turned on as planned to avoid possible disruption, but businesses will still be charged.
William Bain, the head of trade policy at the BCC, warned that owners of corner shops, cafés and local delis would face an “explosion in costs” with some businesses paying “tens of thousands of pounds” extra each month.
“Every day closer to the introduction of the new charges, it is becoming clearer it will have an unfair effect upon small and medium-sized businesses. The loser in this will be British consumers, facing higher prices for everyday foods and reduced choice,” he said.
The Cold Chain Federation, which represents businesses trading perishable products, estimated the new border could add £1bn a year in costs to the food and plant supply chain when customs fees and other related charges are included. It said food price inflation was an “inevitable” result and challenged a government estimate putting it at just 0.2 per cent.
The new regime is being introduced in three phases. EU food and plant products have required so-called Export Health Certificates since January, border inspections start on April 30, and further “safety and security” declarations on all goods will be required from October.
Fulop Illes, the managing director of HunPro, a speciality importer of Hungarian foods which employs 20 people and supplies more than 120 shops in the UK, said that his customs agent had estimated the border inspection fees would cost him £8,880 a month.
The business had already absorbed higher food and haulage costs, he added, so he was having to respond to the new regime by cutting the number of product lines on offer by as much as 30 per cent and raise prices by up to 15 per cent.
“We are trying to cut the number of lorries we bring in, so we only bring one every two weeks and focus on bigger quantities. But the system looks like it’s designed for the ‘big boys’ so they can stay in play and all the small ones will perish,” he said.
Eddie Price, the director of the Birmingham Wholesale Market which opened in 2019 and has 50 tenants selling meat, fish, vegetables and flowers, said there was deep trepidation about the effects of rising costs and border delays reducing the shelf-life of perishable products. “We see the cost estimates by trade associations and that is obviously a source of concern for traders.”
The UK government said the new border was essential to protect biosecurity and level the playing field for British businesses that face similar controls and charges when exporting to the EU.
But industry has been highly critical of how ministers have handled the changes, including announcing the “common user charge” for Dover and Eurotunnel barely three weeks before they came into force.
“We do not accept that government has consulted with the sector,” CCF chief executive Phil Pluck wrote in a letter to environment secretary Steve Barclay earlier this month, adding that the government had “ignored the concerns of the experts”.
Bain at the BCC said the government “had not responded” to suggestions about mitigating the impact on smaller businesses, such as exempting companies participating in a trusted trader scheme from the charges.
“That, and other mitigations, could be used to relieve the pressure on businesses. Instead, they will be hit hard by large invoices every month,” he added.
The government said it was committed to supporting companies as they adapt to new border checks, adding that its “engagement with businesses in advance of these checks ha[d] been extensive”.
This article was written by Peter Foster from The Financial Times and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.