UK imposed BREXIT tariffs add to the UK “no longer as interesting a market as before”

The United Kingdom will begin to apply a new tax on the import of food (meat, fish and seafood, fruits and vegetables…) from the European Union (EU) from April 30, and among the farmers and ranchers most affected by this measure are the Spanish,  who, along with the French, Italians and Dutch, are the main suppliers of the British Isles when it comes to sourcing food.

This is a new tariff that derives directly from Brexit, and whose objective is to cover the public costs of customs inspections. So, depending on each specific type of product, an amount must be paid within a couple of weeks that will be in line with the “risk” with which it is related by the British customs authorities. According to experts, it will amount to an average of 29 pounds (33.85 euro). However, for “low risk” products of animal origin, 10 pounds (11.67 euro) will be paid, while for “low risk” vegetables and derived products there will be no cost.

However, and given that the usual thing in shipments is to consign several product lines, a maximum amount per shipment of 145 pounds (169.24 euro) has been established, as made public by the Department of Environment, Food and Agriculture.

“This new surcharge, which is already known among freight forwarding companies as a common user charge, is making increasingly evident the divergence of requirements demanded of products on both sides of the English Channel,” Ricardo de Vera explained, professor of Logistics at the OBS Business School, who in turn works in an intermediary firm between the exporter and the transport company. “The British Government is going to apply it to both animal and plant products and derivatives of the latter that reach the coasts of the United Kingdom from EU countries.” Whether by truck, through the Eurotunnel, or by freighter to the port of Dover, the closest geographic point to continental Europe.

“And it is added to other costs already announced and some others that are still expected, and whose amount is unknown at the moment. This is derived from the new customs model, which emerged after the traumatic British exit from the EU, which is called Border Target Operating Model (BTOM), and which has actually been applied progressively. Which causes these costs to increase,” continued Ricardo de Vera. “And that means that the United Kingdom is no longer as interesting a market as before. Even before these new tariffs, “Since Brexit, there has been more than a 50% drop in clients exporting there. There is no longer free trade and that has complicated the procedures and documentary procedures and made customs tariffs more expensive.”

According to researchers at the London School of Economics, exports of British products to the EU have fallen by 30% since the return of border and customs controls. “If you are a micro-SME, and the container costs you more than $15,000, you forget about the UK and look for alternative markets in the EU with the facilities of free trade,” concluded Ricardo de Vera.

However, it is still necessary to interpret what was recently legislated. For example, by shipment or cargo, each certificate issued by the importer is understood, in such a way that, in the same truck that transports several, this limit of 169.24 euro can be multiplied by the number of certificates, depending on the load. Or, in other words, the greater the number of destination points that said vehicle has to reach, the greater the payment of this new tariff.

This surcharge is paid exclusively for the truck’s passage through the designated border point, regardless of whether the vehicle may also be stopped for a physical inspection, which makes transportation even more expensive. Thus, these new customs barriers have turned the UK into a more restrictive market, says Fidel Delgado, CEO of Neoalgae, an Asturian technological SME dedicated to microalgae biotechnology in areas as diverse as food, nutricosmetics and health. “Our export commitment has been and will continue to be very strong. However, there are many difficulties and barriers to product certification as a result of Brexit, which increases the economic costs to the point of making them unviable.”

Despite selling its gel to moisturise and protect tattoos very well on British soil, Fidel Delgado explained that, among one thing and another, registering a product exceeds 2,000 euro. “The new regulations, which are no longer the European Trademark Registry, require you to have an accredited laboratory there, in addition to a warehouse and a series of expenses, which are a feasible investment if you know that you have sold a certain amount of product in advance; but what if not? Better to look for less problematic markets.”

There are those who point out that not enough time has passed, since a change in the trade regime is a very structural phenomenon that requires a longer time perspective to understand its true dimension. But Brexit has negatively affected small Spanish export businesses. As always, even more so the smaller its size.

One thing is clear however that despite the promises of cheaper food after BREXIT splashed across the newspapers leading the charge, these additional costs will be passed to the consumer, and so the opposite is actually true, and this is only for those products which continue, as many exporters are abandoning the UK for simpler, and more sustainable markets that trade with the established criteria set by the EU.

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