The new charging structure for imported products of animal origin from the EU, such as fresh food, will be imposed as part of the government’s post-Brexit Border Target Operating Model.
The charges will apply to imports entering the UK through the Port of Dover or Eurotunnel, regardless of whether they are stopped for checks at the border control post (BCP) and will come into effect when the second phase of BTOM is introduced on 30 April.
“Logistics businesses have been pressing government for detail on the level of charges and how and when they will be implemented on imported goods since the Brexit vote,” said Nichola Mallon, Head of Trade at business group Logistics UK, which represents the whole sector.
“With only 27 days to go until these new checks and charges are to be applied, the cumulative cost facing businesses, and details of the compliance regime that will underpin it, are still not clear.
“The charges to be imposed on imported goods - £29 for loads of medium and high-risk products of animal origin, such as foodstuffs, and £10 for low-risk products - at government-run Border Control Posts will have a significant impact on the cost of doing business with the EU. While a cap on the maximum charge for any one consignment recognises the administrative complexity facing groupage operators, these charges will hit them and SMEs hardest.
“These charges, as well as all the other inspection fees to be charged by the Animal and Plant Health Agency, Port Health Authorities and Local Authorities and the charges that will be set at commercially-run Border Control Posts, will need to be paid somewhere in the supply chain,” she continues.
“Logistics businesses already run on extremely narrow margins and cannot simply absorb these additional costs, so it seems likely that they will have to be passed on to customers in the form of higher prices.
According to Ms Mallon, logistics businesses have been making their feelings known to government about the proposed border charges for some time, but their opinions have been overlooked:
“81% of businesses that responded to the government’s own consultation on its proposed charging structure at the border made it clear that these charges will have a fairly or extremely negative impact on their business.
Today’s announcement makes it very clear that the government isn’t listening to those who make sure our shelves are stocked and at the lowest possible prices. As a sector we reiterate our call on the government to publish the modelling behind its assertion that the impact on food inflation will be 0.2% over three years: we believe the reality will be very different.”
Cold Chain Federation Chief Executive Phil Pluck said: “It is extremely disappointing that the Government announced the charges at the last minute, leaving affected businesses little time to revise their commercial arrangements with EU customers. This is in no way helpful to UK based importers and the whole EU supply chain. It reinforces the Government’s slapdash approach to a vital part of UK PLC.
“Our main concern is that this is now certain to negatively affect food prices. The confirmation that common user charges will apply from 30 April means that UK importers of medium and high-risk goods will have to pass this cost onto either the EU importer, the smaller UK retailer, or the UK consumer.
“EU exporters are also shouldering the additional cost of Health Certificates which may discourage many from exporting food and plant products to the UK in future.
“Ultimately, this will increase business costs and food prices and potentially lower choices for the shopper."
Pluck added: “This could and should have been handled better by HM Government. The Government consultation was launched in June 2023! And with just three weeks to go before BTOM implementation the response is published with confirmation of Common User Charges.
“The logistics and coldchain sector will pick up the pieces and make this work but it is an understatement to say that we don’t feel supported in implementing and working with the new import regulations.’”
Reacting to the announcement of the charge, Marco Forgione, Director General of the Institute of Export and International Trade (IOE&IT), said: “With the announcement of the Common User Charge the worst concerns of SMEs in the UK and EU have come to fruition. While larger businesses have the capacity to absorb this cost, it will be small businesses that will feel the full force of these charges.”
“Up to an additional £145 per consignment might mean profit wiped out completely. Business might look to change the way that they import their goods, perhaps buying from a distributor once the goods are already imported. This would result in reducing the frequency of orders, increasing the price for the consumer and ultimately limiting the variety a of products available in UK shops and restaurants.”
The additional costs could “ultimately make the UK a less attractive nation to trade with for smaller businesses in the EU”, Forgione added.
IOE&IT customs and trade expert Anna Doherty said: “As always, it is important to remember that the severity of this charge will be felt differently by large importers who are bringing thousands of pounds’ worth of goods at any one time, where the cost might be spread across a number of items and might not affect the landed costs that much.
“The story will be different for SMEs, where an additional £145.00 per consignment might mean a business’s entire profit is wiped out completely.”
Echoing the thoughts of Forgione, Doherty warned that this might cause a smaller business to change the way that they import their goods, perhaps buying from a distributor once the goods were already imported.
Mike Parr, director of perishable goods specialist PML Seafrigo, said the announcement is yet another blow to the already fragile fresh produce sector which has already been hit by so many additional costs and challenges due to the post-Brexit border control plans.
“The common user charge (CUC) is effectively another business tax that will be applied to each commodity line in a Common Health Entry Document (CHED). Although fees are capped - £145 for every consignment arriving via the Port of Dover or Eurotunnel –this is another expense for importers and retailers to bear, which will of course be reflected in further delays at the ports and another price hike for essential food items.
“What is particularly frustrating is that the fee is being levied for all fresh produce/plants goods passing through Dover or Folkestone – even if they don’t pass through the government controlled inspection post at Sevington.
“PML Seafrigo has its own 24/7 border control post at Lympne, which is the closest point of entry to the Port of Dover (closer than Sevington), we have a dedicated transport and logistics hub for imported goods and yet our customers will still be charged the CUC even though they will not be using the Sevington facility.
"The government is effectively asking businesses such as ours to collect taxes on their behalf. And the fact that this fee will be reviewed and updated annually by Defra is itself worrying, it could easily be increased in 12 months’ time.
“Once again, the consumer will ultimately pay the price not just due to the inflated cost of these goods but also, via a reduced availability of certain food items. Post-Brexit, there is a growing reluctance to export fresh produce to the UK because it is now fraught with bureaucratic policies and red tape and this latest additional cost is just further ammunition for that argument.
“All this at a time when we were under the impression that the government was encouraging the nation to consume more fresh produce as part of the drive towards a healthier lifestyle. This will ensure the exact opposite result.”