Key Takeaways
- The U.K. and EU are negotiating a sanitary and phytosanitary (SPS) deal that may remove the need for most border checks on food imported from the EU.
- Business owners who have invested in control points to accommodate checks on imports of fresh produce and plants may see their facilities become redundant.
- The industry has spent significant amounts of money on control points, with some businesses investing hundreds of thousands to several millions of pounds.
- The prospect of an SPS deal is "bittersweet" for businesses, as it would decrease border friction with the EU but render their investments useless.
Introduction to the Issue
The United Kingdom’s departure from the European Union has led to significant changes in the way goods are imported and exported between the two entities. One of the key areas affected is the importation of fresh produce and plants, which requires strict checks to ensure compliance with sanitary and phytosanitary (SPS) regulations. In anticipation of these checks, many businesses have invested heavily in control points to facilitate the inspection and clearance of their imports. However, with the U.K. and EU currently negotiating an SPS deal, there are concerns that these control points may become redundant, leaving businesses with significant financial losses.
The Impact on Businesses
Nigel Jenney, CEO of the Fresh Produce Consortium, has expressed concerns about the potential impact of the SPS deal on businesses that have invested in control points. According to Jenney, several members of the consortium have spent "anything from a few hundred thousand to several millions" on control points to accommodate checks on imports of fresh fruit and vegetables and cut flowers. This investment was made in good faith, in response to government requests, but now it seems that these facilities may no longer be needed. Jenney has criticized the government for not providing sufficient support to businesses that have made significant investments in preparation for the new regulations.
A Case Study: Provender Nurseries
Provender Nurseries, a wholesaler of plants and plant products, is one of the businesses that has invested heavily in a control point. The company imports 80 percent of its stock from the EU and has spent around £250,000 to convert a large general-purpose barn into a control point. The process of setting up the control point took three years and involved significant paperwork. However, with the prospect of an SPS deal, the company’s site operations manager, Stuart Tickner, has expressed mixed feelings about the development. While he supports the SPS agreement and believes it will decrease border friction with the EU, he is also concerned about the potential waste of the company’s investment in the control point.
The Bittersweet Nature of the SPS Deal
The prospect of an SPS deal is "bittersweet" for businesses like Provender Nurseries. On the one hand, the deal would simplify the importation process and reduce border friction with the EU, making it easier for companies to trade with European partners. On the other hand, it would render the control points that businesses have invested in redundant, leaving them with significant financial losses. This situation highlights the challenges faced by businesses in navigating the complexities of Brexit and the need for greater support and guidance from the government.
Conclusion
The negotiation of an SPS deal between the U.K. and EU has significant implications for businesses that import fresh produce and plants. While the deal may simplify the importation process and reduce border friction, it also poses a risk to businesses that have invested heavily in control points. The government must provide greater support and guidance to these businesses to help them navigate the challenges of Brexit and minimize the financial losses associated with redundant control points. Ultimately, the success of the SPS deal will depend on the ability of businesses to adapt to the new regulations and the government’s willingness to provide support to those affected by the changes.