Brexit 2.0: What's Ahead for UK Businesses?

Having recently passed the first anniversary of Brexit, looking back, there’s no doubt that 2021 presented challenges for the UK’s food manufacturing sector. Now the dust has firmly settled on the agreement, and we have entered year two, what does ‘Brexit 2.0’ hold? And what does this mean for the food manufacturing sector? Gary Dodsworth, UK Road Director, Rhenus Logistics, outlines the changes businesses should prepare for in 2022. 

In 2019, pre-pandemic, food and drink manufacturing comprised almost 20% of the UK’s total manufacturing turnover, accounting for £104.4 billion in revenue. Currently, British food exports to the EU make up more than 70% of total food exports, equalling £18bn each year and equating to 3.2bn litres of exported products annually. 

However, recent legislative changes and disruption to the supply chain have left some UK Food Business Operators (FBOs) facing challenges. Almost 50% of UK businesses reporting challenges with exporting goods have previously cited the end of the EU transition period as the main cause, with companies striving to adapt to extra border checks and paperwork and the costs associated with these. Recent data shows that UK food and drink exports were down £2.7bn, almost 16%, in the first three quarters of 2021 compared with pre-pandemic levels. This is largely a result of a drop in sales to the EU of £2.4 bn as a result of new legislative changes.

Initially, all the focus of Brexit was on getting to grips with new rules and procedures, getting goods through the border and keeping supply chains moving, particularly given the globe was tackling a pandemic and driver shortages as well. There was an acceptance from authorities that businesses needed to time to get systems in place. 

We saw this with the Rules of Origin – used to clarify where materials used in the production of goods originate, opposed to their source of shipment – as the government provided a grace period before the first reports were due from December 2021 onwards. Now, just over a year on from the UK’s official leaving date of the EU, 2022 has brought new trading rules with it.

In light of the current challenges facing businesses, particularly the food manufacturing sector, the new trade rules have been pushed back to January and July 2022. Therefore, the grace period is now over, meaning there are further requirements that importers and exporters have to comply with. 

These changes were first broadcasted on 14 September 2021, when the Government announced a number of changes to the timetable for introducing import border control processes in the Border Operating Model. We have collated a full list to help UK FBOs prepare for the changes ahead. 

• Full customs declarations and controls have been introduced from 01 January 2022, with Safety and Security Declarations now not required until 01 July 2022 
• Pre-notification requirements of Sanitary and Phytosanitary (SPS) goods, which were due to be introduced on 01 October 2021, have now been introduced from 01 January 2022. 
• From 01 July 2022, certification and physical checks will be introduced for: 

• All remaining regulated animal by-products
• All regulated plants and plant products
• All meat and meat products
• All remaining high-risk food not of animal origin. 

• From 01 September 2022, certification and physical checks will be introduced for all dairy products 
• From 01 November 2022, certification and physical checks will be introduced for all remaining regulated products of animal origin, including composite products and fish products. This also applies to food stuffs such as biscuits, chocolate and cheese and onion crisps which contain a cheese powder
• High-priority plants and plant products checks will transfer from place of destination to designated BCPs and control points from 01 July 2022

Now that the UK Government has moved to full customs declarations and controls from 01 January 2022, it has introduced its GVMS (Goods Vehicle Movement Service) platform. GVMS, the UK’s IT platform to administer control of goods at borders, aims to deliver a seamless cross-border solution by providing a single transaction concept for departures and arrivals. The introduction also brings additional customs requirements. 

With the support of our dedicated in-house customs team, Rhenus is able to provide an end-to-end solution for customers, complete with expert advice for all of a business’s customs formalities. Through having one point of contact to manage all your customs requirements, including export, S&S, border and import formalities, your transport needs will be simplified and, importantly, you’ll have peace of mind. 

For further details on the new requirements, visit www.gov.uk.  

(1)https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/articles/theimpactsofeuexitandcoronaviruscovid19onuktradeinservices/november2021
(2)https://www.fdf.org.uk/fdf/news-media/press-releases/2021-press-releases/uk-food-and-drink-sees-a-significant-and-persistent-drop-in-exports/