A long road ahead

Some of the post-Brexit problems faced by UK seafood exporters have been fixed but there is still plenty to be done, reports Sandy Neil

It’s one thing after another. No sooner had the seafood industry started to recover from the export crisis caused by Brexit than another one, a fuel crisis, added to the list of challenges.

How the fuel crisis unfolds through the next few weeks remains to be seen, but we are now 10 months into the problems facing exports and imports with the EU. With a clearer perspective, we can see where we’ve been, where we are now and where we are going.

First, the story so far. The introduction of new border checks and paperwork since the end of the Brexit transition period on 31 December 2020 caused disruption to exports of fresh fish and seafood to the EU.

Firms said they were having their shipments rejected due to forms filled in using the wrong colour of ink or confusion over paperwork. Others reported lengthy delays getting trucks through customs, to the point where produce was spoiling or its value declining as it was not as fresh.

The UK Government set up the Scottish Seafood Exports Taskforce in February. Scotland Office Minister David Duguid said its primary aim was to work collaboratively across UK and Scottish governments to increase confidence in the seafood and aquaculture supply chain, by ensuring that medium- and longer-term export issues are resolved.

Core industry members included the Scottish Salmon Producers Organisation (SSPO), the Scottish Fishermen’s Federation, the Scottish Seafood Association, Communities Inshore Fisheries Alliance and Seafood Scotland.

Six months later in August, the taskforce published its final 17 page report, highlighting a commitment to digitise the system for Export Health Certificates (EHCs) and explore the option of a Scotland-based “clearing house” for exports. This would mean that firms could check that all their paperwork was compliant with EU rules before leaving Scotland. However, the report stated: “Due to EU law it is not possible to have EU customs clearance outside of the EU.”

The SNP criticised the decision to disband the task force. Karen Adam, SNP MSP for Banffshire and Buchan Coast, said: “After just six months and only eight meetings, the Westminster Government’s taskforce has submitted its final report so you might expect that the numerous problems faced by our vital seafood industry have been resolved.

“Spoiler alert – they have most certainly not and the job is not even half done.”

David Duguid, then Deputy Secretary of State for Scotland and now Fisheries Envoy following September’s cabinet reshuffle, dismissed the criticisms. The Conservative MP for Banff and Buchan said: “It’s nonsense for the SNP to dismiss the hard work and many achievements delivered by governments and industry through the taskforce.

“Far from it – so successful was the format in delivering results for an industry essential to many of our coastal communities, it was agreed by all – including the Scottish Government – that ongoing engagement with stakeholders would continue and I look forward to chairing the new Scottish Seafood Industry Action Group.”

In spite of the spat, ministers from both governments agreed to continue discussions with representatives drawn from the catching, processing, exporting and aquaculture sections of industry, and a new successor group, the Scottish Seafood Industry Action Group, met on 1 September.

Issues discussed included the EU’s decision to delay implementing new regulations around export certification until next year, and the industry’s concerns about a shortage of labour in the processing sector.

Duguid said: “There was good news on progress on digitisation of paperwork for exporters and we are raising concerns with the EU about plans that would mean each animal for live export would have to be counted, possibly adding unnecessary stress for shellfish such as crabs and lobsters.”

UK Gov minister for Scotland, David Duguid visits Scottish Sea Farms salmon hatchery at Barcaldine, Argyll, Scotland.

So how much better, or worse, are things now? As the new action group meets around the table, we gathered many perspectives from around the seafood industry. Fish Farmer asks them which problems have been solved and which ones remain.

Hamish Macdonell, Director of Strategic Engagement for the SSPO, says: “Everybody working on exports has got used to working with the new systems, so progress is faster and more efficient than it used to be. The issue of extra paperwork has not gone away, but those involved have learned to live with it.

“It is taking about 45 minutes to process every EHC and about two hours for the entire process in the hubs for each load. There is a plan to digitise the EHC system to make it more efficient. This is due to happen in the next six months. We hope this will speed up the process.”

Macdonell adds: “Labour is turning into a major issue for the sector, particularly in processing. Our members are operating with significantly lower staff numbers than usual, with little prospect of this improving.

“It is difficult to see an easy answer to labour shortages, except for opening up to Eastern European labour once again, which isn’t going to happen. So the SSPO is working with both [the Scottish and Westminster] governments to find out if there are any other solutions that could be introduced to ease the pressure this is causing.”

Jimmy Buchan, Chief Executive Officer of the Scottish Seafood Association, also believes progress has been mixed.

“Fish is now flowing well after a terrible start to the year,’ he tells Fish Farmer. “There were problems on many fronts, with the sector not being fully ready for the change required, the UK Government introducing a system untried and untested on 1 January that was full of bugs and IT problems, as well as a French border control replicating similar problems to the UK. It was the first day at school with new class, new teachers – even the janitor was new!

“We can now proudly say that after calling on the UK Government to set up a taskforce consisting of both governments’ ministers along with stakeholders, we have resolved many of the issues by introducing a better digitalised system that can streamline and speed up the paper trail. The downside is added cost in issuing certification of products – more man hours are required even if [the system] is now improved, and small companies can no longer afford to send small consignments.

“We know and understand the system better with correctly filled paper work speeding [things up] – [there is now] experience and understanding of exactly what is required. We must bear in mind the EU did not make this easy for us for obvious reasons – that said, the EU exporters to the UK still receive concessions on sending goods into the UK.”

Buchan adds: “There is a long way to go on this and until we see the EU having to endure the same hoops to jump through, there is no appetite to make trading easier.”

Seafood Scotland’s Chief Executive, Donna Fordyce, provides an overview of the progress made, and the lack of it, in the sector. “Groupage is now largely operational,” she says, “although this must be viewed in context because many companies have been forced to cease trading as the post-Brexit model is too challenging for them to continue.

“A lot of work has been done by Scottish and UK governments, and by DEFRA [the UK Government’s Department for Environment, Food and Rural Affairs] to ease matters. Seafood Scotland has also played its part; our Brexit specialists have been working to support the industry, ranging from webinars covering the most common issues to one-to-one support for operators who need specialist advice. The issues around importing have not manifested yet as a result of the postponed introduction of the new regulations, so we are preparing to provide ongoing support to the industry in this regard early next year.

“DEFRA has made welcome tweaks to the system, which has removed some barriers, but there is no doubt we need an end-to-end digitised solution to further reduce the time burden on exporters, particularly the smaller operators. Seafood Scotland is in close contact with DEFRA and our understanding is that a new system should be operational early next year.”

However, problems still remain, she added: “The post-Brexit cost burden is significant, with additional costs borne by exporters of between £400 and £500 per consignment when you take into account the labour costs as well as the operational ones. One exporter I was talking to recently has been forced to scale back operations by around 50% because the amount of labour required to prepare consignments for export is too high for him to continue at his pre-Brexit level of trading. Other companies have had to put expansion plans on hold or even cease trading altogether.”

Fordyce adds that labour shortages are having “a huge impact”.

She says: “The majority of Scottish seafood processing premises are in rural, coastal communities and have always relied on Eastern European workers. Before Brexit, across Scotland as a whole, 52% of the workforce was from Eastern Europe. That rose to 76% in the North East of Scotland, and, in some factories, was as high as 92%.

“I have heard from scores of companies on this issue – for example, one producer is operating with 10 vacancies out of a total head count of 27. Many others are having to turn down work as they simply cannot recruit. On top of that, wages are rising because of the increased competition for staff, so that is having a knock-on impact too.”

The issue is right across the food and drink sector, Fordyce says, but Seafood Scotland is doing its bit to identify solutions across the industry, working with Scotland Food and Drink and other organisations to highlight the career opportunities within the industry and to increase the skills base. Fordyce says the “Sea A Bright Future” initiative  – led by the Scottish Seafood Association and Seafish – is a great example of this.

She says: “We need further automation to address the labour issues and I have made this suggestion to DEFRA; specifically, that it should consider supporting further automation via the £100m funding pot they announced in September. However, it is clear that we will need private as well as public sector investment if we are to tackle the longstanding challenges in this regard.”

Another major problem looms ahead for UK importers of seafood, according to Richard Harrow, CEO of the British Frozen Food Federation. “The type and range of products the industry sends to the island of Ireland presents a unique challenge,” he says.

“The key issue is that Export Health Certificates have normally been used for primary products shipped in large volumes over a distance. Our trade with the island of Ireland is totally different from this, with many complex products in small volumes.

“The Government’s new Command Paper, which seeks to rewrite the Northern Ireland Protocol, has come about as they realise the enormity of the challenge in meeting the details they signed up to. You do have to ask the question ‘why did they ever sign up to the current agreement?’ They clearly had absolutely no idea of how the modern food supply chain works. This is a real disappointment given just how important the food industry is to the economy.”

In September, the UK Government said that full customs declarations and controls on animal-based products coming in from the EU to the UK would not be imposed until 1 January 2022. EHCs, which involve inspection by qualified veterinary professionals – will not be mandatory until 1 July 2022. The decision means each of these two stages will come into effect six months later than had been planned, which itself involved a later timetable than was originally set out.

When the changes do come into force, Harrow fears that the requirement to have EHCs signed off by a qualified vet could delay shipments by up to four hours – or even longer. Also, he warns that the need for exporters to pre-notify the authorities regarding all shipments 24 hours before arrival at a UK Border Control Post will create further delays.

Meanwhile, UK producers have cried “foul” since the latest delay extends the period in which the regulations apply to UK producers exporting to Europe, but not to produce flowing in the other direction – further tipping the balance against the UK’s own seafood industry.