Brexit: Business owner on having to cut thousands of products
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British expats living in the EU have been left without many of the products they could easily buy at home, a new investigation has found. It comes as Brexit Minister Lord David Frost stressed the importance of the UK’s “divergence” from Brussels. This week, he warned against copying the “European social model” and urged Britain to move towards lower taxes in order to be successful.
In a speech at a Centre for Policy Studies conference on global trade, Lord Frost looked beyond his immediate post-Brexit job of easing tensions over Northern Ireland’s border.
However, he admitted that negotiations with his European counterpart, Maroš Šefčovič, was his “top priority”.
Many so-called “teething problems” have emerged since the UK officially left the EU’s customs union and single market earlier this year.
From January 1, 2021, the Trade and Cooperation Agreement (TCA) officially came into effect, setting out arrangements on things like goods and services, digital trade and fisheries, as well as a string of further policy areas.
The deal was intended to safeguard a level playing field and fundamental rights between the two.
Businesses in both the UK and the EU welcomed the TCA as a sign that frictionless trade would continue.
But, according to a recent Dispatches investigation, the picture could not be more different.
The programme’s presenter, Harry Wallop, spoke to several UK small and medium-sized businesses about their trading with the bloc since the TCA came into effect.
Each one said they had experienced a downturn in trade with the bloc due to new administrative and customs costs and complications.
One, British Corner Shop, had been forced to cease sending some products to Europe altogether.
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From their headquarters in Bristol, the online retailer had been exporting over 6,000 well-known supermarket products to customers in the EU before Brexit.
This represented nearly 50 percent of its business.
But things changed earlier this year when Britain became subject to strict European regulations.
Mark Callaghan, managing director at the company, said: “In January we had 6,000 products available, in February that dropped to around 2,000 products and then by June and July we were down to about 1,200 products.”
This is because British Corner Shop, like many UK businesses selling similar products to the EU, cannot circumvent the new “animal origin” rules.
These require any business trading with the EU to prove the origin of its animal-based products: what herd the animal came from, what farm it was brought up on, and so on.
Mr Callaghan said: “Even Walkers cheese and onion crisps contain cheese powder.
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“Anything that contains anything with animal origin requires a private attestation form.
“You have to detail where that cheese powder has come from, what farm it’s come from, what the supply-chain looks like.
“We cannot detail that for individual items being shipped into the EU.”
As Mr Wallop noted: “Unable to identify a single cow, from a single herd, on a particular farm, that produced the milk, that went into the cheese, that ultimately became powder, in one packet of cheese and onion crisps, British Corner Shop was forced to withdraw more than two-thirds of its product range from its EU market.
“As a third party supplier, it is unable to trace the origins of thousands of the products it sells.”
Other products that the company was no longer able to send into the EU includes some Cadbury chocolate.
British Corner Shop lost £250,000 in the first three months of 2021.
An unsustainable figure, it took drastic action and decided to move its entire European operation out of the UK and into the EU.
It took with it jobs that were previously based and paying taxes in the UK.
While Prime Minister Boris Johnson previously made no note of such arrangements, Conservative ministers have since said that certain obstacles will initially mar UK businesses trade.
Dispatches spoke to George Eustice the Environment Secretary about troubles faced by UK businesses since January 1.
While he conceded that there would be some short-term problems with the transition out of the single market, paired with the coronavirus pandemic, he argued that the temporary issues were worth paying for because the UK now had “democracy and self-government”.
He said: “Generally speaking, there’s been teething issues.
“Because we’ve left the customs union, and because we’ve left the single market, that does mean there are some additional administrative processes that the EU requires.
“And obviously there is a cost to that, and I accept that some businesses would rather not have that cost.
“But it is the price, if you like, of having democracy and self-government.”
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