30 April 2024 - SPS Import Controls: A Case Study of Danish Pork Exporters

Explore the challenges faced by Danish pork exporters following Brexit-induced border checks on 30 April 2024. Discover how effective customs management plays a vital role in overcoming regulatory obstacles and maintaining trade resilience in this comprehensive case study.

Executive Summary Brexit's implementation of stringent border checks has reshaped the trade dynamics between the UK and the EU, presenting Danish pork exporters with formidable challenges. This executive summary encapsulates the comprehensive case study based on a Bloomberg report, outlining the experiences of Danish Crown and the critical role of customs management in navigating Brexit-induced complexities. As Danish pork exporters grapple with increased bureaucracy, rising costs, and supply chain disruptions, proactive engagement with customs management experts like Customs Manager Ltd emerges as pivotal. By offering tailored solutions to address SPS and Brexit-related hurdles, Customs Manager Ltd empowers exporters to navigate regulatory complexities with confidence, ensuring trade resilience amidst uncertainty.

1. Introduction

2. Background

3. Challenges Faced

4. Response Strategies

5. The Role of Customs Manager Ltd

6. Case Study Analysis

7. Conclusion

8. Recommendations

9. More Information and Links

Introduction

Brexit has reshaped the trade landscape between the UK and the EU, presenting unprecedented challenges for the agricultural sector. Based on a Bloomberg report, this case study delves into the experiences of Danish pork exporters amidst the complexities of Brexit-induced border checks. It explores the hurdles encountered, and the adaptive strategies employed by exporters. Additionally, it highlights the pivotal role of customs management in equipping exporters with the expertise needed to navigate regulatory obstacles and maintain trade resilience.

Background

Since April 30, the UK has enforced stringent checks on fresh food imports, representing a significant departure from the era of seamless trade experienced during its EU membership. Despite multiple delays by ministers, driven by concerns over potential inflation and the politically sensitive issue of supermarket shortages, the reality of Brexit's consequences is finally materializing almost eight years after the 2016 referendum.

The case of the Danish Crown

Danish Crown, a leading pork exporter, exemplifies the complexities and adaptations required in this new trade landscape. The majority of pork imported by the UK originates from the EU, with a significant portion sourced from Denmark. The company ships 1,000 tons of bacon weekly to the UK, has long been readying itself for the impending checks.

Customs and Health Certificates

Now, up to six employees find themselves engaged in a new responsibility: completing customs and health certificates mandated by the UK's departure from its primary trading partner. This scenario vividly illustrates the impact of Brexit, with a noticeable increase in time spent navigating bureaucratic hurdles for shipments bound for Britain.

"This new controls may be detrimental to the UK, if smaller exporters might opt to withdraw from trade with Britain due to increased costs and bureaucracy, resulting in higher prices for consumers. And how will these new UK SPS controls make already safe EU food even saver is a mystery to me" Arne Mielken, Managing Director, Customs Manager Ltd

Red Tape starts in Denmark....

Great Britain now requires SPS food products, primarily those of animal origin, originating from EU Member States to be accompanied by an Export Health Certificate (EHC) signed by a veterinarian in their country of origin. For each shipment of bacon or pork cuts destined for England, Danish Crown's shipping team must complete such an EHC. They input details such as weight, departure date, and destination into the TRACES EU database. This process takes approximately ten minutes before the document is forwarded to an onsite veterinarian from the Danish Ministry. After providing a stamp of approval to certify that the goods are disease-free, the document is re-uploaded and stamped as "valid." Upon shipment arrival, UK authorities receive a five-page digital document. Companies like Danish Crown are required to obtain a certificate for each product type, typically one per truck. However, split shipments would necessitate additional certificates.

....and continues in the UK

Danish Crown must ensure pre-certification up to 24 hours before the product's arrival using an IT system called the "Import of products, animals, food, and feed system (IPAFFS)".

It's crucial to meticulously input details about incoming shipments, encompassing the scientific Latin name of the species, commodity code, gross and net weight, as well as routing details such as the arriving port and estimated arrival time.

This meticulous process enables UK health inspectors to conduct a thorough risk analysis, determining whether goods from Danish Crown should undergo border controls. If selected for inspection, the driver is contacted and directed to a Border Control Post for identification, documentary checks, or comprehensive inspections. The duration of the truck's wait at the post is determined by the controlling officer.

Following this, a Customs Declaration is filed, incorporating references from the IPAFFS declarations and formatted appropriately for the UK's Customs Declaration System (CDS). Any misspellings or formatting errors trigger a "no match" and prompt the system to default to a control requirement. In cases where there's a "no match" between IPAFFS and CDS, customs and SPS clearance are withheld, even if there's no actual health problem with the shipment.

What about the costs?

The costs associated with importing food products into the UK post-Brexit are numerous and substantial:

Danish veterinary certification, essential for compliance, comes with a significant price tag, adding to the financial burden.
Additionally, EU exporters are required to pay fees of up to £145 for items like sausages, milk, and fish to navigate British ports, particularly Dover and the Eurotunnel at Folkestone. These fees are implemented to counterbalance the expenses incurred by the UK's new health checks.
Additional costs imposed by the ports themselves for utilizing the Border Control facilities.
Customs and IPAFFS declarations costs are to be added, too.

Collectively, these expenses contribute to a considerable increase in the overall cost of importing food products, posing financial challenges for exporters.

The situation underscores the broader implications of Brexit-induced trade friction on consumer spending and business operations.

What is the impact on the UK?

The British government has already said that expects these fees to incrementally raise food prices by 0.2% over three years. However, some economists offer a grimmer perspective, with restaurants, delicatessens, and wholesalers anticipated to bear the brunt. According to the Bloomberg article, Allianz Trade predicts a 0.4% decline in consumer spending. “Businesses may decide to pass these costs inevitably on to consumers,” remarked Arne Mielken, Managing Director of Customs Manager Ltd., providing insight into the potential repercussions.

Transport conditions like in the 80s

The operational changes observed at every stage of the journey from Danish farms to the UK market vividly illustrate the disruptive impact of Brexit on trade dynamics, even for imports to the EU. According to the article, Christian Pedersen, head of operations for the route at Danish shipping firm DFDS, likened the post-Brexit environment to dealing with a third country, emphasizing the increased customs formalities reminiscent of the mid-70s. Each day, Pedersen's team meticulously checks dozens of lorries loaded onto DFDS vessels bound for the UK, ensuring compliance with the requisite customs paperwork.

Delays - A danger with perishable food

Danish Crown, along with numerous other companies, has voiced apprehensions regarding potential delays in perishable product deliveries if the UK were to fall behind on spot checks.

This is because Danish Crown bacon is carefully loaded into temperature-controlled trailers to maintain its quality during transit across the North Sea. Given the perishable nature of food products, any delays in the inspection process could have significant ramifications on product quality and shelf life.

Efficient and streamlined border control

This concern underscores the urgency for efficient and streamlined border control procedures to ensure the timely delivery of perishable goods. Additionally, delays could disrupt supply chains and impact the overall market competitiveness of exporters. It emphasizes the critical need for effective coordination and cooperation between regulatory authorities and businesses to mitigate any potential disruptions and uphold the integrity of trade operations.

How We Can Help

Our team of experts provides customized solutions to tackle SPS and Brexit-related challenges head-on. Through the optimization of customs procedures and meticulous attention to SPS regulatory compliance, we equip EU exporters and UK importers with the confidence and efficiency needed to navigate the evolving trade environment for food and food products successfully.

Our SPS & Veterinary Controls Support Services: Navigating Veterinary and SPS Regulations Made Easy with Customs Manager Ltd

Conclusion

Brexit-induced border checks usher in a new chapter in UK-EU trade relations, characterized by complexities and uncertainties. Danish pork exporters exemplify resilience, yet proactive regulatory compliance and strategic partnerships remain paramount. Through collaborative efforts and tailored solutions, exporters can navigate the evolving trade landscape with confidence.

Recommendations

Stay updated with regulatory changes through our update service, ensuring your business remains compliant and informed. Leave your e-mail address at www.customsmanager.info to get started.
Utilize our dedicated training and bespoke services to enhance your understanding of SPS regulations and streamline your operations. Explore at www.customsmanager.org/events
For further guidance and support, we are here to assist you through these changes. Contact us at info@customsmanager.org for any inquiries or +447914650183 assistance you may need.
Engage with customs management experts like Customs Manager Ltd to navigate regulatory complexities effectively. Book a free call on www.customsmanager.org
Learn about the new SPS checks by engaging in training at www.customsmanager.org/events
Prioritize proactive compliance measures to mitigate risks and ensure trade continuity.
Invest in tailored solutions to optimize supply chain efficiency and mitigate disruptions.