IGD - Economics bulletin 23 December

Date : 23 December 2020

Your overview of political and economic news with a focus on the food and consumer goods industry, featuring the latest guidance on COVID-19 and planning for the end of the transition period with the EU.

Delays at ports

A protocol has been agreed between France and the UK to reopen the French border to UK arrivals, including accompanied freight. This follows an announcement by the French government on Sunday night that it was shutting its border with the UK for 48 hours in a bid to stop the new variant of COVID-19 spreading across the channel. The protocol, which will run until 6 January 2021 and be reviewed on 31 December, will allow all lorry drivers to enter France if they have proof of a negative COVID-19 test taken within the previous 72 hours.

With the military joining NHS Test and Trace staff in Kent to carry out rapid lateral flow tests, it is expected that it will take a few days to clear the backlog of freight lorries heading across the Channel.

The government is advising hauliers not to travel to Kent until further notice as they work to alleviate congestion at ports. Companies are advised to arrange for hauliers to obtain proof of a negative COVID-19 test at the point of departure to avoid further congestion at the ports.

The Department for Transport has published updated guidance for HGV operators and drivers crossing international borders.

Trading and supply chain

Despite the agreement between France and the UK to reopen the French border, there is concern that there will be increased pressure on the supply of fresh food from next week. This is due to expected delays in clearing the backlog of freight lorries at Dover that creates a shortage of available hauliers in Europe required to import goods to the UK.

However, the supply chain remains resilient ahead of Christmas, with no significant shortages in response to elevated demand from shoppers.

Drivers’ hours

The Department for Transport has announced a temporary relaxation of the enforcement of EU drivers’ hours rules for all road haulage sectors in GB. This will apply from 12:01am on 23 December 2020 until 11:59pm on 22 January 2021.

Seasonal workers

The Seasonal Workers Pilot has been extended and expanded for an additional year with 30,000 visas available for people to come and package fruit and vegetables on UK farms for a period of up to six months.

EU exit trade talks

Negotiations are continuing between the EU and the UK with less than two weeks to go before the end of the transition period on 31 December. A new deadline for a decision has not been set, although time will be required to ratify any deal by the respective parliaments before the end of the transition period on 31 December.

Northern Ireland

The Department for the Environment and Rural Affairs (DAERA) in Northern Ireland and the FSA have published compliance protocol for Sanitary & Phytosanitary Controls and Point of Entry Marketing Standards Checks: GB to NI Movements

Defra and DAERA are making progress on compiling a list of authorised traders (a broad definition of supermarkets and their trusted suppliers) who can benefit from the three-month grace period for authorised traders moving food from GB to NI.

Businesses can also self-identify to be included on the list. The deadline for applications is 5pm (GMT) on 28 December.

Authorised traders will not need to meet the full certification requirements during the grace period. However, there will be some lighter touch documentation required. Details of this are expected to be published today.

Those who do not qualify under the authorised trader scheme will be able to use the new Movement Assistance Scheme (not to be confused with the existing Trader Support Service) to ensure they do not incur costs for inspection and certification.

Businesses can also apply for the UK Trader Scheme to declare goods they bring into Northern Ireland are not ‘at risk’ of moving to the EU so that EU duty will not be payable on those goods.

Concerns have been raised that under current commercial contracts the manufacturer is identified as the importer and many do not have a fixed place of business in Northern Ireland, which is a requirement of the UK Trader Scheme. It is understood that during the first four months of the scheme authorisation will be given on a provisional basis to all applicants meeting the criteria. During this period, if businesses supplying supermarkets can meet all other criteria, and can identify a fixed place of business in Northern Ireland where it is evident goods are being provided for final use by end-consumers (e.g. a supermarket depot or store), provisional authorisation will be granted.

Businesses that do not qualify for the UK Trader Scheme will be able to reclaim duty paid on goods at risk if they can provide evidence that they remained in GB or Northern Ireland. However, it is understood that the mechanism to apply for reimbursement will not be operational for a period of time.

EU Exit support for businesses

Watch our latest EU Exit webinar to hear what the UK’s exit from the EU could mean for the food and consumer goods industry.

To support preparation, the UK government has issued guidance specifically for food and drink businesses.

IGD has also provided additional support to help businesses prepare for EU Exit including an EU Exit Checklist.

Businesses may also wish to refer to the EU EXIT Foodhub, an FAQ website for food and drink businesses.

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