Impact of Brexit and Covid felt as confectionery exports nosedive

The UK government’s latest figures on British chocolate exports to the EU reducing by 68% in January due largely to Brexit policies makes for extremely sobering reading for all involved.

Amounting to a year-on-year loss of nearly £30 million in that one month alone, the situation is particularly concerning and it is no surprise that the Food and Drink Federation is calling for urgent action.

What has the British government done in response to the scenario – which has undoubtedly been worsened by the ongoing Covid crisis? Well, it has belatedly come out with a £20 million fund to assist UK firms with exporting and importing issues. However, this doesn’t even cover January’s losses on confectionery exports, let alone make up for the heavy losses right across the food and drink spectrum.

To heap even more pressure on the situation, imports (pictured main image) to the UK are also down 25%, with many businesses now concerned whether trading with Britain is worth the additional red-tape that had not been a factor for decades.

Another measure put forward by the government is to extend a ‘grace period’ for its new border arrangements with Northern Ireland, which have caused major concern from businesses across both sides of the water, as additional paperwork effectively created ‘a division down the Irish Sea’ which Prime Minister Boris Johnson had promised would never happen – but in reality, whether he likes it or not, it has.

This presents a huge problem for the UK government, as the EU begins legal action against the British government over what it believes are clear breaches of the Brexit agreement it signed just several months ago.

Such a hugely entangled mess is deeply concerning for all involved, and something that business groups, including the Food and Drink Federation have been widely warning on for some considerable period, and sadly their calls for reason on securing clearly defined long-term agreements on trade arrangements have not been answered.

While I have written on this issue just after Christmas that the Brexit deal gave a degree of certainty for both British and EU businesses, the past three months have proved that it in fact has created a whole swathe of trading problems – from hugely increased costs of exporting and importing goods, through to slowing critical time-sensitive logistics chains -which are vital for the food and drink sector.

Though the broader issue of Brexit has proved significantly divisive, whether anyone was for or against it as a notion, it is clear to all that the present state of affairs is patently unsustainable. The new rules of origin tax tariffs in particular are adding to operating costs of many companies to the point that they’re no longer able to contemplate exporting from Britain.

The UK trades more than 40% of its goods with the EU – this isn’t going to change, so it remains baffling as to why we have now made it so incredibly hard to on our small and medium-sized enterprises – including those operating within confectionery and bakery segments, to actually carry out their trade with near neighbours.

As reported earlier, the Food and Drink Federation has called for urgent talks to resume between the UK and EU to deliver a resolution to the situation that works well for both sides – there surely must be an answer? If there is, it’s needed with great speed, and plenty of ingenuity.

Neill Barston,editor, Confectionery Production

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Confectionery Production