The Windsor Framework – impacts on grocery businesses

Date : 01 March 2023

After months of negotiation, the UK and the EU have announced the Windsor Framework, intended to address issues with the Northern Ireland Protocol.

The Framework should help to solve operational difficulties faced by grocery businesses in moving goods from Great Britain (GB) to Northern Ireland (NI), without threatening EU interests or the Good Friday Agreement.

It therefore safeguards the interests of grocery shoppers in NI. It should also assist GB grocery businesses that send goods to NI, through:

  • Lower operational costs
  • Reduced administrative complexity
  • Reduced liability
  • Better fit with modern supply chain practices (eg: mixed loads, central distribution)

The Framework suggests an improvement in relations between the two parties, giving assurance that they will be able to work together effectively to address other shared issues (eg: biological hazards, climate change).

The EU in particular has made significant concessions in support of UK political objectives – as the Framework is implemented, the EU will need reassurance that these concessions were justified.

There is, however, some way to go before the Framework can be implemented in full. The full support of all political parties in Northern Ireland will be essential.

In parallel with political processes, UK officials will need to work effectively with businesses to transition to the revised arrangements. More clarity is needed around biological monitoring and SPS checks.

Experience has shown that businesses often have specific, highly technical concerns which may be overlooked as new practices are developed.

As always, the devil will be in the detail.

What is the Northern Ireland Protocol?

The Northern Ireland Protocol is a supplement to the Withdrawal Agreement which regulates the UK’s exit from the EU. The Protocol deals with special geographic and historical issues relating to NI.

NI is the UK’s only land border with the EU and may provide a route for goods to move between the UK and the EU without meeting market regulations or without payment of taxes.

Usually, this would be addressed through physical border infrastructure, such as check-points, but this would contravene the pre-existing Good Friday Agreement.

The Protocol is a time-limited compromise intended to deal with this issue, by giving NI special status. In the original version from 2020, key points relevant to trade in goods are:

  • For diplomatic and customs purposes, NI is part of the UK, benefiting from any trade deals or treaties agreed by the UK (article 4)
  • No customs duties apply to goods moved from Great Britain (GB) to NI, unless those goods are “at risk” of moving on to the EU, either with or without further processing (article 5)
  • Where goods are deemed to be “at risk”, as decided by a committee, the UK levies taxes on behalf of the EU and traders can reclaim this money if goods are ultimately sold in NI
  • NI remains aligned to EU rules in certain areas of product regulation, including agri-food commodities, processed foods and veterinary medicines (article 5 and annex 2)

How has the protocol impacted grocery supply chains?

Grace periods and easements were provided for businesses moving grocery products from GB to NI and extensive administrative help is also given (eg: the Trader Support Service, Movement Assistance Scheme).

In spite of this, traders have complained of significant barriers to the movement of grocery goods. Shipments can move relatively freely from NI to GB, and between NI and Ireland (in both directions).

However, movement from GB to NI has become more difficult since EU Exit as a result to the Protocol. In effect - if not in law - the Protocol creates an international “border” in the middle of the Irish Sea.

In administrative terms, sending grocery goods from GB to NI is now similar to sending goods from GB to France. Challenges include:

  • Grocery products now require extensive new paperwork such as Export Health Certificates for products of animal origin (each with veterinary sign-off) and sometimes Rules Of Origin statements.
  • Mixed loads of food products – perhaps a shipment sent for a retail distribution centre in GB to a store in NI – require appropriate paperwork for every item, on every journey, which means high costs.
  • Shipments may be subject to frequent checks, although these are – in theory – targeted via intelligence and anticipated risk, rather than being random.
  • Certain foods are banned from entering NI from GB, including seed potatoes and chilled processed meats such as sausages.

What has been agreed?

For grocery businesses, the major change is the implementation of “Red” and “Green” lanes at the NI border for goods shipments inbound from GB (para 10).

Goods moving from GB to NI, for sale in NI, will use “Green Lanes”, allowing them to enter NI with minimal administrative burden (ie: normal commercial paperwork only). Paperwork checks will be minimal (para 20).

Any goods legal for sale in the UK will be legal for sale in NI (paras 20, 21 and 22), including those previously banned. This will include goods originating outside the UK, provided that they meet UK standards.

Goods moving from GB to NI for onward movement to the EU will use “Red Lanes”, with normal EU border processes applied – no change here.

The whole island of Ireland will continue to be managed as a single “epidemiological area” and measures will continue to be taken to control biological risk (para 23).

This new arrangement will be under-pinned by extensive data sharing, intended to ensure the integrity of the EU internal market.

Will The Framework fix the issues?

The new Framework moves the grocery supply chain serving NI away from the EU model and into much closer alignment with the rest of the UK.

It addresses many of the recognised issues with the Protocol and should help grocery businesses in GB to go on supplying customers in NI, with much less cost and complexity.

In particular, it will make it much easier for SMEs in GB, with limited expertise and resources, to serve demand from NI.

Are there any possible hurdles?

Agri-food goods pose specific biological risks, absent from other markets. Managing this will require close attention and strict controls.

Special measures will be implemented, beginning with meat, dairy and composite products before being rolled out to other food products over 2023-25.

This is referred to in para 23 and also in the UK government Command Paper of 2021, but detailed proposals are not provided. Grocery businesses should pay close attention to this aspect as it develops.

The whole “Green and Red Lane” scheme will require grocery businesses in GB to allocate goods to different loads according to their intended destinations.

In practice, this is likely to mean sending separate vehicles to Ireland and to NI, even if they have to travel part-full.

Also, grocery businesses which operate in both Ireland and NI (eg: M&S, Tesco) will need to keep goods carefully separated. Goods sold in NI stores would not be legal for sale in Irish stores.

To maintain trust on the EU side, goods will need to remain in their allocated markets. If goods “leak” from NI into the EU without going through border procedures, then the EU may have second thoughts about the Framework.

Maintaining trust will be critical.

What happens next?

The Prime Minister has stated that there will be a House of Commons vote on the Framework “at the appropriate time and that vote will be respected.”

The Windsor Framework will be submitted for approval by the UK / EU Joint Committee, probably in March 2023. After this, UK and EU legislators will take steps to ratify the Framework and give it legal effect.

Practical implementation of the Framework will require some administrative changes such as issue of revised guidance to officials and businesses.

The UK government’s Northern Ireland Protocol Bill, which was intended as a “backstop” in case negotiations failed will be dropped. The EU will halt the various legal actions currently under way against the UK.

Work on the Target Operating Model (TOM) is ongoing – details of the draft plan are expected soon, with implementation by the end of 2023.

TOM is a UK government plan to reform border operations for the whole of the UK, potentially impacting any business that imports grocery products.

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