Further costs to already struggling businesses

New checks introduced under the UK's Brexit trade agreement are expected to impose significant costs on businesses, with one company estimating expenses of up to £225,000 annually, according to its co-owner.

Effective from 30 April 2024, a range of products including meat, dairy, plants, and seeds now undergo physical checks upon entry into Britain from the European Union. Businesses anticipate immediate increases in import costs, particularly affecting smaller enterprises, which may subsequently pass on price hikes to consumers for certain items.

John Davidson, co-owner of Tom Brown Wholesale, a flower company, foresees annual expenses ranging from £200,000 to £225,000 for his business due to these checks. He expressed the difficulty of absorbing such costs entirely.

The second phase of border controls, implemented at midnight, is part of the UK's Brexit trade agreement. The government asserts that these measures will enhance biosecurity, with business costs deemed insignificant compared to potential impacts of major disease outbreaks like foot and mouth.

While health certificates were introduced in January for EU goods such as cut flowers and fresh produce, physical checks for these items commenced on Tuesday. This marks a reversal of the free flow of goods permitted under the EU single market since 1993.

Physical inspections will vary based on goods' risk categories. High-risk products like live animals will undergo identity and physical checks for pests and diseases. Medium-risk items will also be subject to scrutiny, while low-risk goods such as canned meat won't require checks.

Despite assurances from the government that these checks will only marginally impact food prices, businesses anticipate the possibility of higher inflation. While some welcome the checks for enhancing biosecurity, others express concerns about their operational implications and potential price increases.

The British farming industry, heavily reliant on EU imports for items like beef, sheep meat, and pork, faces uncertainty regarding the impact of these checks despite years of preparation. Smaller importers are expected to be disproportionately affected.

In response, businesses like Hamish Johnston, a London-based food retailer, anticipate raising prices to maintain profit margins. Food price inflation, a significant contributor to overall cost of living increases in recent years, remains a concern for consumers and businesses alike.

Amid ongoing uncertainty, the Federation of Small Businesses emphasizes the importance of clear communication regarding trade checks to mitigate the ripple effects of increased costs on businesses, including potential closures.

^{Photo by Brandie Robbins}