In 2016 when the UK decided to leave the EU, many promises were made, one of which was how we could develop better regulation which would relive the burden for businesses. This was because EU membership required the UK to adhere to EU rules and regulations, limiting the ability of the UK to diverge.

But if we want to export to the EU, the UK is still required to comply with EU rules but now has to provide fully qualified vets to inspect and sign off all products of animal origin which leave UK shores. This also comes with other requirements such as additional paperwork, record keeping and systems to support the issuing of export health certificates (EHCs), port charges and customs agents’ fees. So, more cost and complexity, not less.

Meat is a special case

The BMPA is often asked “why do we need the EU? Can’t we simply sell more of our products on the domestic market?” In answering this it is first important to remember the meat industry works differently to the majority of other industries. We are not buying specific parts to build a product such as a car or ingredients to make a cake. Meat processors start with the whole animal and must find a market for each part.

We’re already effectively aligned

With very few exceptions, some part of every animal which is produced for slaughter in the UK will be exported to the EU. For this to be allowed, every part of the supply chain for that animal has to comply with EU public and animal health rules, meaning the UK is already aligning with the EU, but because we are not legally aligned, we now must undergo additional paperwork and checks, adding tens of thousands of pounds to UK businesses which inevitably adds to costs which have to be found somewhere in the supply chain, either through lower margins or higher prices, driving food price inflation.

An example of how the supply chain continues to adhere to EU rules and regulations – and how we must remain so if we want to export to that market – is the recent change the EU made to their Animal Health Regulations (AHR) to include the need for farms to receive ‘regular’ animal health visits by a veterinarian in order that the meat from those animals can be exported to the EU. Needless to say, this adds yet another layer of complexity, bureaucracy and cost; quite opposite the commitments made when we left the EU.

Formal alignment would mean huge cost savings

Most of this would fall away if the UK were to align with the EU. This would remove the need for vets to certify things we are already doing; it would remove the need to provide EHCs and the need for animal and public health border checks at EU Border Control Posts, slashing the cost and bureaucracy weighing on UK businesses. Currently, certification alone is costing the industry over £60 million per annum and, given that we are already complying but still having to jump through all the certification and SPS control hoops to prove it with no added value, alignment would save hundreds of millions of pounds.

Early feedback from BMPA Members put the additional post-Brexit cost of sending a full 18 to 20 tonne truckload to the EU at some £1500. This is largely supported by a study produced for the Scottish Government by the Andersons Centre in July 2023 which puts this figure closer to £1600 and based on market prices at that time, this would be equivalent to a tariff of around 2% and is not far off the net profit margins many meat businesses operate at.

More recent feedback from BMPA members would indicate that this number is on the conservative side and if loads are physically checked, samples taken or there are other issues, the costs can be much higher and routinely in excess of £2000 per load in terms of additional costs versus pre Brexit levels.

Above all, those BMPA member companies that export, and that is most of them, are now employing teams, literally dozens of people, solely to deal with all the process and complexity associated with export to the EU. This has also made trade very difficult, if not impossible for those businesses that simply do not have the resources to do so.

This investment is not to add value or for business expansion, but simply to confirm that their products fully comply with EU regulations which they do anyway.

This significant cost of administrative infrastructure and all the associated costs of certification, border procedures and the logistical ‘drag’ caused by these directly affect competitiveness as well as eating into the low single digit net profit margins that the meat processing industry operates at. It also puts British companies at a disadvantage compared with our EU competitors.

A revised deal with the EU which removes all of this cost and complexity is needed urgently. We should be clear that anything short of alignment will not remove most of the costs we currently face which are incurred regardless of whether consignments are checked or not and, at the risk of being repetitive, any products exported to the EU must fully meet EU rules anyway, so there is little downside.

Trade friction with Northern Ireland

There is another key point to make which is that, at a stroke, alignment would remove the trade friction and costs associated with trading with Northern Ireland; no need for 'not for EU labelling', EHCs, red and green lanes etc and the costs and admin associated with them. According to the Anderson's report the total additional trading costs for sending goods to NI from GB through the red lane are substantially the same as to mainland EU.

At present, red lane trade in Products of Animal Origin at risk of entering the EU need EHCs and, in line with the firm commitment from government that there would be no additional costs for businesses trading on the internal UK market, the costs of certification are covered by government under the Movement Assistance Scheme (MAS).

However, for budgetary reasons, we are now told that the scheme will end in June. This is government reneging on the post-Brexit commitment, meaning that GB businesses will have to pay for certification to send goods to another part of UK. This will both be a disincentive to ship to Northern Ireland and also increase the costs to NI businesses bringing in raw materials from GB. It will, in effect, make it preferable to buy from the Republic of Ireland. Alignment would strip out all these costs and remove this unnecessary trade friction, largely getting rid of the need for the Windsor Framework.

Taking the new government at its word on its growth agenda, an alignment deal would cut costs, improve competitiveness, free up trade and result in increased revenues all of which would contribute to that objective.