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Inland food checks if Brexit ends in no-deal

Inland food checks if Brexit ends in no-deal

Defra has announced that rather than border checks, should there be a no-deal Brexit, food inspections will take place inland to ensure compliance with protocols. With the official Brexit date looming (29th March), Defra has confirmed that marketing standards processes at UK borders will not change in the short term if the UK leaves the EU without a deal. However, these arrangements are only temporary. The measure does not apply to green banana imports from the EU, with importers told to contact the PEACH helpdesk or the SASA Horticulture and Marketing Unit as appropriate. Horticultural inspectors will continue to assess fruit and vegetables travelling in transit from third countries through the EU to the UK to determine whether an inspection is required at the border and ensure that they comply with the UK’s marketing standards, according to the Defra notice. For produce imported via a non-EU third country, marketing standards checks will continue to be carried out at the border.

The UK will continue to accept certificates of conformity issued by countries in the Approved Inspection Scheme (AIS). Most imports from countries on the AIS scheme will not require routine marketing standards checks, but a small sample will be randomly selected for inspections.

 

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Chile and UK seal trade continuity agreement as Brexit looms

Chile and UK seal trade continuity agreement as Brexit looms

Chile is the first country to sign a post-Brexit deal with the UK. On Wednesday 30th January, representatives of the two countries met in Santiago to seal a bilateral trade continuity agreement to protect Chilean exports from the impacts of Brexit. The Chilean Government press release states that the agreement mimics the conditions of the current trade deal that Chile has with the EU, this finding a positive solution to a potentially highly complex situation. The agreement also includes a series of instruments to amplify and modernize its coverage.

“This new agreement contains a general evolutionary clause to ensure that every two years discussions will take place on how the trade relationship can be improved,” said Rodrigo Yáñez, director general of the Chilean Foreign Relations Ministry.

Trade between the UK and Chile was worth US$1.36 billion in 2018 – up 19% from the previous year. Chilean exports climbed 17%, mainly driven by fruit, wine and processed food.

 

 

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Southern African citrus growers welcome Brexit

Brexit could mean UK consumers have access to southern African citrus fruit at lower prices, according to Citrus Growers Association of southern Africa CEO Justin Chadwick.

Brexit should see a normalisation of citrus trade between southern Africa and the UK, “unencumbered by protectionism, tariffs and technical barriers to trade,” says the Citrus Growers Association of southern Africa.

In his weekly newsletter, published on July 1, CGA CEO Justin Chadwick also said exiting the European Union could see consumers in the UK – the biggest importer of southern African citrus in the past century, taking about 10% of its total citrus exports – enjoy southern African citrus at lower prices.

Chadwick said the impact of the vote by the UK to exit the EU is yet to be fully played out and the consequences – good and bad – will surface for many years.

However, among the longer term ramifications from the point of view of the South African citrus trade include that an independent UK will probably introduce its own plant health regulations, which should be easier to comply with than present EU regulations. “This alone, would be a significant boost for the Southern African citrus industry,” he said.

The UK will also need to enter into new trade negotiations with southern African countries with regard to trade preferences and duties. “Since citrus would not be a sensitive product with regard to protecting domestic producers it could be anticipated that the UK would have reduced duty levels for southern African citrus. This would mean that UK citizens could potentially enjoy excellent quality southern African citrus at even lower prices.”

As for the devaluation of the British Pound against the US$ following the Brexit decision, Chadwick said this will mean imports are more expensive in the UK and could reduce demand for them. “Interestingly the Rand/UK Pound exchange rate has not changed significantly. It will be interesting to see if the currency recovers.”

CGA CEO Justin Chadwick

Southern Africa supplies 36% of the UK’s imported grapefruit, 27% of its imported oranges, 19% of its imported soft citrus and 11% of its imported lemons. South Africa holds a dominant position amongst southern hemisphere suppliers to the UK.

Chadwick also said recent Freshfel statistics show South African fruit and vegetables hold the third spot in terms of imports by the UK in value terms (€510 million), behind Spain (€1.6 million) and the Netherlands (€886 million).

Read his full newsletter here: http://www.cga.co.za/page.aspx?ID=4571

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How Brexit could disrupt the UK’s fresh produce trade

Ceasing to enjoy the benefits of the 36 free trade agreements signed by the EU with non-EU countries is among the consequences the UK – heavily reliant on external imports of fresh produce – could face it is exits the EU.

Ceasing to enjoy the benefits of the 36 free trade agreements signed by the EU with non-EU countries is among the consequences the UK – heavily reliant on external imports of fresh produce – could face it is exits the EU. This is one of the issues raised by Freshfel Europe, the European Fresh Produce Association, is the wake of the UK referendum result in favour of leaving.

In a press release on the potential impact of Brexit, the organisation said it is “severely concerned” by the economic consequence the outcome of the referendum may have on the fresh produce sector.

Short term consequences might be disruption of trading relations and insecurities based on a drop in the pound, while in the longer term, the UK’s departure would lead to an elimination of existing framework trade agreements, it said.

Higher fruit and veg prices

Elaborating on the potential short term impact for the fruit and vegetable sector, the group said the drop of the British pound is already causing insecurity among fresh produce business operators. Depending on the currency stated in contracts, the current drop is causing severe losses on one or the other side of business operations.

This price volatility will in the long run be passed on to consumers and could see higher fruit and vegetable prices in the UK as well as limiting supply given the loss of competitiveness of the British market. This will not only affect sourcing from the EU- 27, but from all non-EU countries.

Longer term impact: trade upheaval

On the longer term fallout, the group stressed that the UK, a significant importer of fresh produce from non-EU countries, currently enjoys the benefits of trade liberalisation conditions set by the existing 36 FTA’s that the EU signed on behalf of the 28 member states.

“Fresh produce trade was in this respect liberalised with many countries in the Mediterranean basins, with Southern Hemisphere countries, ACP countries and more and more countries in Southeast Asia.

“With the possible exit of the UK, the FTA’s negotiated by the EU will cease to apply for import into the U.K. The country will have to recreate its trade relationships with third countries, governed by the necessity, to renegotiate bilateral trade deals individually with each country. By experience, these negotiation processes are usually time consuming, lengthy and need to comply with complex legal requirements,” Freshfel Europe said.

Moreover, the departure could also trigger renegotiations of EU-FTA’s, initiated by non-EU partner countries claiming changes by the contracting parties.

There may also be an impact on the British labour market with regard to the residency rights of foreign workers.

Call for rapid clarification of political situation

Freshfel Europe called for prompt clarification of the political situation, to give business operators the opportunity to adapt to new market conditions.

It said it will closely follow coming political and economic developments, voicing the requirements of the fresh produce business.

In summary, the group said it will “continue to work closely with its members to monitor the specific aspects relating to fruit and vegetables, to minimise the impact for the fresh produce sector of this development.”

Snapshot of trade between the UK and the EU 27

The UK market is currently supplied with fresh produce originating from close to 120 countries.
In 2015, the UK received more than 5.6 million tons of fresh fruit and vegetables (worth €6.8 billion) from either the EU or other origins from around the world, of which 52% (2.9 million tons) originated in the EU.

The main fresh produce suppliers are:

  • Spain (1.4 million tons),
  • The Netherlands (700,000 tons – including some trans-shipments),
  • South Africa (350,000 tons),
  • Costa Rica and Colombia (300,000 tons each),
  • also the Dominican Republic, France, Germany, Ireland (ca 200,000 tons each).

Products include:

  • bananas (1.1 million tons),
  • apples (450,000 tons),
  • soft citrus (300,000 tons),
  • oranges (280,000 tons),
  • table grapes (280,000 tons)

The UK also exports/re-exports up to 240,000 tons to EU-27 and non-EU countries, trade worth €240 million.
Ireland is the main destination, taking up close to 50% of this business.

Freshfel Europe represents the interests of the fresh fruit and vegetables supply chain in Europe and beyond. It has over 200 members, including companies and associations.
Read its full statement here: www.freshfel.org/docs/2016/Press_releases/20162806_Press_Release_U.K._referendum_and_its_consequences_on_the_fresh_produce_sector.pdf

Image: Brexit by Petr Kratochvil, License: Public Domain. Source: http://www.publicdomainpictures.net/