New post-Brexit checks on EU imports could add more than £8 a month to the average food shop

For retailers across the country, a post-Brexit world means being tangled up in red-tape and customs charges, ITV News Business and Economics Editor Joel Hills reports

“What is Brexit like? It’s like a massive pile of paperwork,” laughs Susan Schmeider without mirth.

Ms Schmeider works at German Deli, a food wholesaler in East London, which finds itself tangled up in red-tape and customs charges.

Ms Schmeider has just been showing me how to enter commodity codes into the government’s “Import of Products, Animals, Food and Feed” (IPAFF) system online - pre-notifying HMRC of a consignment of she is hoping to import.

The food she is ordering is designated “low risk,” which makes the task easier but export and import declarations still need to be raised, for which a customs agent charges her a flat rate of £50 plus £1.50 per commodity line.

From next week, Ms Schmeider's orders will also be subject to the government’s new Common User Charge of £10 per commodity line (£29 for “medium risk” products) to cover the cost of inspections which begin at the UK border.

Ms Schmeider's supplier has also introduced a new “Brexit Admin Fee” in anticipation of longer border waiting times.

The net impact of all these changes is it is limiting the choice and availability on offer at German Deli and pushing up the prices they charge their customers.

On January 31 this year, the government began phasing in its new Border Target Operating Model (BTOM) for all imports of animal and plant products from the European Union (EU).

The new rules will apply to meat, fish and diary as well as fruit and vegetables.

“Medium risk” and “high risk” goods now require health certificates, which in the case of animal products need to be signed off by a vet to show they meet UK standards - which are currently the same as EU standards.

From Tuesday April 30, local authorities will begin to check documents at the UK border to ensure they have been correctly filled out and physical inspections of lorries will begin, although fewer than one in 100 consignments will be inspected.

Last year, the government estimated this bureaucracy, which it says is necessary to protect the UK from infectious diseases, will add £330 million a year to the cost of importing goods.

The government won’t tell us how it calculated this figure.

Independent, expert analysis for ITV News suggests the cost of the new border controls will be £2.9 billion - almost ten times higher.

The three customs and boarder professionals who carried out this analysis want to remain anonymous.

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They have 80 years experience between them and have advised major supermarkets, wholesalers and the government on the impact of Brexit on trade.

They say their calculations are “conservative” and do not include the cost of “Safety and Security Declarations”, which the government wants hauliers to submit at the border later this year.

If their estimate proves accurate and the £2.9 billion of extra costs are passed on to consumers then the average household in the UK would see the price of their monthly food shop rise by £8.57.

We showed the analysis to Anna Jerzewska of Trade & Borders, an independent customs consultant who has previously given evidence and advice to parliamentary select committees.

She described the calculations as “robust”.

Ms Jerzewska said: “These numbers are estimates but they do seem to be based on fairly modest assumptions. They include the official charges and a range of direct and indirect costs.”

She added: “There is a general tendency for higher costs to be passed on to consumers, we’ve seen that happen time after time in the last few years.”

The government has delayed the implementation of full border checks on EU imports five times since Brexit.

In April 2022, Jacob Rees-Mogg, then minister of state for Brexit Opportunities, explained that the delays were necessary to avoid disruption at ports and to protect consumers in the UK from higher food prices.

The headline annual rate of food inflation fell back to 3.9% last month, but food prices are still 30% higher than three years ago.

The government’s new border controls will make some food more expensive - they are also a much bigger problem for smaller importers because the customs charges are largely fixed per consignment.

Supermarkets fill entire lorries with food, but smaller importers fill pallets. As a result, they end up paying more in customs fees for individual items.

'The bottom line is none of this needs to happen,' Labour's Stella Creasy told ITV News

“Businesses that import food, whether they are corner shops or delis, and I suspect even supermarkets, are looking at [BTOM] with horror and finding its already hitting their ability to get products before it’s even been fully introduced,” Stella Creasy, a Labour MP, told ITV News.

“We know the charges are coming in next week and I think it’s going to mean stockpiling and shortages.

“And [businesses] have little choice but to pass it on to consumers because how else are they going to make ends meet?”

Labour has pledged to seek a veterinary agreement with the EU if it wins power at the next election, which trade experts have said could reduce the levels of paperwork and border checks in both directions if the UK agrees to closely align with EU rules.

“The bottom line is none of this needs to happen,” says Ms Creasy.

“Nothing in Brexit means that we have to charge people these silly amounts of money to bring food into our country. This government has chosen to do it.”

We asked to interview the Environment Secretary, Stephen Barclay, about the new rules but were told he wasn’t available.

A government spokesperson said: “We are confident in our analysis and our figures which, unlike these figures, have been produced through a rigorous analytical assessment. “These border checks are fundamental to protecting the UK’s food supply chain, farmers and natural environment against costly diseases reaching our shores. “Our robust analysis has shown they will have minimal impact on food prices and consumers, with just a 0.2 percentage point increase on food prices over the next three years. “The cost of checks is negligible compared to the impact of a major disease outbreak, such as Foot and Mouth disease in 2001 which cost businesses and our wider economy more than £12.8 billion in 2022 prices.” The government’s new border controls are inflationary, but are unlikely to worry the Bank of England (BoE) which has raised interest rates in order to subdue and stabilise price rises.

The Bank will probably take the view that the cost of the new rules is a permanent, one-off “hit” - the price of some goods will rise but then remain at a new level - rather than something it needs to respond to.

Consumers, if they notice a change in prices, may feel more strongly.

Back at German Deli there’s a sense of exasperation.

Until January, Ms Schmeider was importing 27 varieties of sausages. Her German supplier has now told her she can order a maximum of five.

In practice, Ms Schmeider's has not managed to import a single sausage from Germany since BTOM was introduced.

“We ran out of sausages last month,” Susan says.

“They are our best-sellers and our turnover last month was down 25% on last year. We keep up hope that the situation is going to improve.”

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