New Brexit Trade Agreement Levies Steep Toll on Some UK Businesses

A co-owner claims that one company would spend up to £225,000 annually on new inspections brought about by the UK’s Brexit trade deal. Imported plants, seeds, dairy products, and meat from the EU will all be subject to inspections. There has been a lot of talk about how these trade checks would force smaller businesses to raise prices for their consumers. According to John Davidson, who is also a co-owner of the flower firm Tom Brown Wholesale, the inspections would cost his company £200,000 to £225,000 a year.

At midnight, the second phase of border restrictions, part of the UK’s trade deal for Brexit, went into effect. The government said that the new border approach would improve biosecurity and that companies would incur negligible costs compared to the impact of a significant plant or animal disease outbreak in related expenses. The unrestricted movement of such products has been permitted within the EU single market since 1993, but implementing such border restrictions in the UK reverses that.

Products will be subject to physical inspections according to the “risk” category into which they are classified. Live animals and other high-risk items will undergo thorough identification and physical inspections at the border to ensure they are free of pests and illnesses. Canned meat and other low-risk commodities will not be subject to biosecurity inspections, while those with a medium risk will be.

Products originating from the Republic of Ireland, a significant food provider to the United Kingdom, are now exempt from the new inspections. According to the UK government, inspections of Irish products will not take place until November. Firms, particularly smaller ones, have voiced concerns that the extra inspections might cause supply chain disruptions and cost increases (importers are being charged £29 per shipment of certain items). British businesses would lose over £330 million a year due to the taxes, according to the government.

A British Meat Processors Association statement said it’s tough to gauge the impact on meat supplies, even after four years of preparation. Although the trade group expressed concern for smaller importers, it had reason to believe that more prominent importers would be unaffected.

With food price inflation reaching 4% in the year leading up to March, food price hikes have been a key factor in the rise in the total cost of living in the UK in recent years.

According to Martin McTague, head of the Federation of Small Businesses, the members were “still unsure” about the trade checks.