Since Brexit came into full force at the start of the year, new regulations governing the export of Product of Animal Origin [POAO] goods to the EU have caused significant problems for numerous UK firms. Symply Pet Foods, a £35 million turnover Queen’s Award for Enterprise winning company which supplies 1,000 pet stores UK wide and exports to 45 countries, is one business to have felt the pinch. Speaking exclusively to The Leaders Council, Managing Director James Milbourne revealed more about how new export rules have impacted his business, and called on the government to devise a solution to an issue which is burdening industry with extra bureaucracy and costs, just to keep exports running.
As has been the case with many UK exporters, post-Brexit red tape has left Symply struggling to get its product into Europe, as Milbourne outlined.
He said: “We are experiencing huge problems at present with haulage to the EU. The main problem is that haulage companies are very reluctant or unwilling to take POAO goods to the continent since there is a risk of delay at the border control posts and of trucks being held at customs for a period of time.
“We had sent two truckloads of our product to Europe as of February 4, when we would normally have sent upwards of 15 by that stage. We have also suspended further picking of orders as our 27,000 square foot warehouse is now full.”
The difficulty in getting freight vehicles carrying POAO goods through customs and onto the continent stems from the need for a TRACES declaration and EU health certificate. TRACES is the EU platform for sanitary and phytosanitary certification required for the importation of animals, animal products, food and feed of non-animal origin at plants into the EU, and the intra-EU trade and EU exports of animals and certain animal products. The burden of having to complete this additional paperwork post-Brexit to export produce to the EU is proving a costly one for Symply and numerous other businesses.
Milbourne explained: “We use a range of haulage companies who are not prepared to do a TRACES declaration on our behalf. Where we have contacted UK-based customs agents and asked them to take us on and carry these out for us, each one has refused because they have no capacity to take new clients on. They are too busy. So, we are left with little alternative but to use European haulage companies who are more willing and able to carry them out or send our loads without the certificates. TRACES declarations can be done at the ports, but this inevitably delays the shipment, which for some just isn’t an option.”
Revealing the cost of compliance with EU health certificate requirements, Milbourne continued: “We supply 45 countries worldwide, including over 20 EU countries. Order admin was previously zero, essentially you picked your order, emailed your haulier and they would come and pick it up the following day. In order to comply with these demands, we now have to record batch details of nearly every bag of product, which could be as many as 5,000 bags in a shipment. We then have to collate batch information for each bag, apply for the health certificate for that order and break it down by co-packer. So, one order might need five health certificates because we have five suppliers, and we need one certificate for each. We then have to have a veterinarian come to our premises and inspect every bag to make sure what we’ve recorded matches what is on the bags, they then complete their side of the declaration to get the health certificate, and we have to do this five times for each order for each of our suppliers.
“To give a working example of this, we have recently sent a full container to Greece and getting the veterinarian to come and carry out the inspection cost us £450. It took our warehouse an additional 44 hours to complete all the relevant paperwork, plus five hours of customer service admin. That is the financial and working cost for five health certificates to get our product to Europe. As an EU member, none of this was necessary.”
Furthermore, ensuring that veterinary inspections are carried out in a manner to keep deliveries running on schedule poses another problem.
“Our veterinary inspector now comes in every Wednesday, so our export business has to be run to have everything ready by then. If we do not and the vet cannot carry out his duties, we lose out on a whole week of being able to export our product to Europe because we cannot get the health certificates. Recently, we had so many pending orders that we had to pay out for two veterinary inspectors to come on site or we would not have been able to get the deliveries out, the paperwork burden would have been too much. If we look at this weekly scenario on a yearly basis, we are looking at between £52,000 and £100,000 in extra costs a year just on the vet inspections to be able to trade as before.”
It is no surprise, therefore, that in Milbourne’s view, Prime Minister Boris Johnson’s promises of frictionless trade with Europe that is entirely absent of new non-tariff barriers are much removed from what is now the reality for many UK exporters.
“Boris Johnson’s statement declaring that there are no new non-tariff barriers to trading with Europe is bunkum. The amount of red tape and bureaucracy we have to undergo for European orders is staggering and I am stunned that the PM could stand before the nation and make that statement considering what we have to do now. Trade is anything but frictionless.”
With Northern Ireland also operating under new customs rules following Brexit under the NI Protocol, exporters are facing similar issues even with taking their product across the Irish Sea, as Milbourne elaborated.
He said: “Northern Ireland is now de-facto a separate country in the EU Customs Union, so we are facing the same issues taking our product even as far as Belfast. Why is it acceptable that I have to have a veterinary inspection and a health certificate to send goods to a part of our own country?”
Should the current trading situation remain unaltered, Milbourne warned that his business and other exporters will be left with little alternative but to look at moving production for European orders inside the EU, taking jobs and manufacturing away from the UK.
“Regretfully, we are having to now explore the prospect of producing inside the bloc to supply our European customers to get around red tape. As a minimum, we will be opening a warehouse in Valencia or Northern Italy and sending full trucks of our goods from the co-packers producing for us. This way, we will not see any of the health administration and when it reaches our European warehouse there will be no obstacles for transport elsewhere within the EU. Even though we will always keep our main global production base in the UK, moving European operations elsewhere means less need for production and therefore employment at the UK site, which would be a terrible shame. We are a proud British company, we source our ingredients for our products from the UK where possible, we manufacture most of our goods here, but the situation we find ourselves in now is unsustainable.”
As well as struggling with getting Symply’s products into the EU, even more worryingly for Milbourne, Brexit has restricted the company’s ability to take its product into other international markets too.
He explained: “As an EU member, our business exported to Japan, China, Hong Kong, Malaysia, Singapore, South Korea, the United Arab Emirates and many others, one of which was Russia. The problem we have with Russia is that we have left the EU, so we are no longer trading with that country under EU rules, yet we have no trading arrangement with them as an independent nation to replace that. As a result, we have a scenario where we do not even have any paperwork there to fill out and we cannot even get our product to Russia.”
All this has consequentially left Milbourne and many others facing similar issues wondering when, if at all, they will start to see some benefit from the Brexit project.
“Markets are being cut off, I am struggling to supply the EU, I have £52,000 per year of additional veterinarian costs and a significant increase in time wasted on admin. I am struggling, therefore, to see how Brexit in the here and now is having any sort of positive impact on my business as well as numerous other exporters facing the same issues.”
With the absence of any tangible benefits to Brexit for exporters at least for now, Milbourne has urged Westminster to take action to ratify the situation to help get goods moving.
“This is the process every third nation has to undergo to import to the EU, so I see no way of the bureaucracy changing unless we renegotiate with Europe to ensure we do not have to fill out these certificates for POAO goods. I think it is a very remote possibility, however, that Europe would ever allow a non-EU member state to import into the Customs Union without health paperwork.
“Perhaps the government could offer to underwrite the freight loads, and if there are delays or rejections ministers could offer to cover some if not all of the cost to the haulage companies to get things moving or make them more inclined to take our products? Further to this, I feel the government has to look at the TRACES system and either better inform UK haulage companies how to use it or set up a new UK government operated customs agency such as the TSS in Northern Ireland that could complete customs declarations including TRACES, perhaps even for a fee, in order to get goods moving again.”
Intervention certainly seems the least the government could do, since support for exporters even in the run-up to the Brexit deadline has also come under fire.
Recalling Symply’s experience, Milbourne said: “The support from government has been shambolic to be frank. We were signed up to the POAO register and receiving weekly updates as to what was expected of us. On December 29, two days before the deadline, we were being given updates at 22:00 at night. If you try to contact any government agency even now, it takes a lengthy amount of time to get any sort of response.”
If action is not taken, there is concern among some that disruption could become more frequent.
Milbourne highlighted: “A major concern within industry is that the UK is currently not reciprocating by introducing its own restrictions on imports. We are only seeing this issue with exports. By the time April comes and we have new customs rules in force for products coming into the UK, we could see delays both ways which will only exacerbate the situation. Something must be done about all of this.”