IGD – Economics Bulletin 30 December

Date : 30 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.

EU Exit

The EU and the UK have signed a comprehensive new deal, the Trade and Co-operation Agreement. The European Union (future relationship) bill is expected to be approved by parliament today.

The trade deal removes tariffs and quotas for most goods, but not all food and drink will qualify – products must be of EU or UK origin to benefit. The deal also covers regulation, services, fishing, road haulage and labour movement, as well as other diplomatic matters beyond trade.

Conclusion of a deal removes a good deal of risk and uncertainty for both workers and shoppers, but certain elements of trade will still change under the new agreement such as product labels, sanitary and phytosanitary (SPS) checks, and pre-notifications.

Concerns have been raised regarding the process for obtaining export health certificates (EHCs) for composite products. Defra has been asked to review Animal & Plant Health Agency (APHA) guidance to provide further clarity for official vets on the requirements for signing EHCs.

Concerns have also been raised around the application of new Rules of Origin requirements, with further guidance expected shortly.

Read our latest article on what the Trade and Co-operation Agreement will mean for the food and consumer goods industry.

IGD will continue to provide additional support as further guidance is published.

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

Defra’s digital guide covering the key actions food and drink businesses may need to take from 1 January 2021 is available to download, alongside a range of other digital assets.

Northern Ireland

Defra and DAERA have now compiled 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.

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 the compliance declarations and certificates required are available on the Trader Showcase (this website provides support for businesses moving goods between Great Britain to Northern Ireland from 1 January 2021 including downloadable assets and details of webinars).

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.

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.

Delays at ports

Congestion created by the backlog of freight lorries heading across the Channel has now eased. This follows a protocol agreement between France and the UK to reopen the French border to UK arrivals, including accompanied freight. 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.

Testing is available at Marston for hauliers travelling via the Port of Dover and at Junction 8 of the M20 for those travelling via Eurotunnel. However, businesses are advised to arrange for hauliers to obtain proof of a negative COVID-19 test at their point of departure. Mass testing at supermarket depots is expected to begin today to help avoid any further congestion.

Trading and supply chain

Despite the backlog of lorries in Dover over Christmas, it is reported that there has been only minimal disruption to the supply of fresh food. Overall, the supply chain remains resilient.

However, ahead of the end of the transition period, it is expected that there may be further pressure on the supply chain, particularly for fresh goods in the next few weeks.

COVID-19 – changes to restrictions

With COVID-19 case rises increasing, The Health Secretary is expected to announce today that further parts of England will move up into either tier three or tier four. This follows a previous announcement on moving parts of South East England into tier four.

Absence and COVID-19 testing

Absence levels are reported to have increased in some areas in tier four due to the new variant of COVID-19. It is expected that the roll out of mass testing for the food industry will help to reduce absence rates among low-risk contacts of those testing positive for COVID-19.

Defra is working with the Department of Health and Social Care (DHSC) to put in place the controlled ramp-up phase of mass testing. It is expected to reach out across the industry with more information on how to opt into the mass testing offer in the new year.

DHSC has published a list of private sector (non-NHS) providers who may be able to conduct tests for the presence of coronavirus.

Oxford University/AstraZeneca vaccine approval

The Medicines and Healthcare products Regulatory Agency (MHRA) has authorised the use of the Oxford University/AstraZeneca vaccine. The Health Secretary has announced that the first doses will be given on 4 January 2021. The UK has ordered 100 million doses, enough to vaccinate 50 million people. The UK Chief Medical Officers have provided more details on the prioritisation of first doses of COVID-19 vaccines.

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