UK food and drinks industry bodies have re-iterated their concerns after it was confirmed by the government new ‘not for EU’ labels are to be introduced on all goods targeted at the domestic market.
One industry body executive quoted a UK dairy company as saying new labels alone will cost it £1m ($1.3m) a year.
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Another described it as a “mistake” that would have “a chilling effect on UK food and drink exports”.
The government said yesterday (31 January) it is to introduce the new rules as part of its attempt to smooth post-Brexit trade between Great Britain and Northern Ireland.
Addressing the need for new labelling for any product not intended for the EU, including those staying within Great Britain and not crossing the Irish Sea, it said in its Safeguarding the Union command paper: “A labelling requirement which applies only to goods on the market in Northern Ireland could create a disincentive for businesses and traders to place goods for sale on the Northern Ireland market.
“The small size of the market means that some suppliers may not have been willing to make the change and may have decided, instead, to remove products from the market.
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By GlobalData“The government will address this by legislating to confirm – in line with our commitments since 2021- that labelling requirements on agri-food products are applied across the UK as the framework arrangements are rolled out, to ensure no incentive arises for businesses to avoid placing goods on the Northern Ireland market.”
The UK government said it had established a £50m transition fund, which it suggested “provides a strong basis for the broader roll-out of labelling requirements across Great Britain in October 2024 and then in the final phase for composite products in July 2025”.
UK manufacturers issue warning on costs
However, bodies representing food and beverage manufacturers and processors, which said before yesterday’s paper was published that they feared the labelling requirements would be included, have expressed further concerns about what this will cost their members now that it has been confirmed.
Karen Betts, chief executive, of the Food and Drink Federation said: “We’re waiting for information from the government on exactly how the deal on Northern Ireland will impact the food and drink industry. However, we firmly believe that regulating now for rapid, UK-wide labelling changes would be a mistake.
“Our members have worked hard to ensure that shops in Northern Ireland continue to be comprehensively well-stocked under the new Windsor Framework rules, and we think this is working.”
She added: “Imposing costly, complex labelling changes before we know it is necessary risks pushing up manufacturing costs, and ultimately prices for consumers across the UK, for the sake of it.
“The proposed ‘not for EU’ labels will also have a chilling effect on UK food and drink exports, particularly for SMEs [small- and medium-sized enterprises] and more broadly on investment in UK businesses.”
Betts suggested that the changes happening at the same time as the post-Brexit Border Target Operating Model is coming into effect amounts to “a lot of complex change for companies to implement in unrealistically short time frames, pushing up costs during a cost-of-living crisis”.
Rod Addy, director general of The Provision Trade Federation, said: “The government has promised an imminent consultation on the plan, but this is not to determine if it goes ahead – it’s more to do with how it’s managed and communicated. The original plan was only to have ‘not for EU’ labelling in Northern Ireland. It’s extremely costly and unnecessary for GB businesses.
“One big brand dairy company has told us it produces millions of products a year on shared production lines for the UK and Republic of Ireland. They are looking at changing all packaging to ‘not for EU’, then labelling overall ROI selling units to allow them to be sold there or moved to NI.
“They estimate stickers alone would cost £1m a year, on top of the staff costs to do this. In addition, they would have to invest in a new labelling machine. Another option might be to separate UK and ROI production. However, this would slow down production and cost millions of pounds in reduced service levels.
“That’s a common story for those supplying GB and EU markets.”
A spokesperson for the British Meat Processors Association said: “One thing that is disappointing is that the command paper completely omits any reference to the consultation we were told would take place prior to any decision on a roll-out for the ‘not for EU’ labelling requirement.”
But on a more positive note, the spokesperson said getting rid of checks on the movement of goods into Northern Ireland is helpful to the meat industry.
By getting rid of checks on the movement of goods into Northern Ireland, from Great Britain, the government has won the commitment of the Democratic Unionist Party (DUP), Northern Ireland’s largest unionist party, to restore a power-sharing executive in the province after a two-year hiatus.
The DUP has argued previous attempts to smooth the passage of goods into the province post-Brexit have not gone far enough and undermined its position in the UK.
Last year’s Windsor Framework replaced the Northern Ireland Protocol, which had effectively seen the province remain part of the EU for trading purposes because of its land border with member state the Republic of Ireland.
That meant goods exported from the UK mainland to Northern Ireland faced border checks, additional duties and paperwork, vets checking some meat products and a ban on others.
While the Windsor Framework did away with most of the checks for goods staying within Northern Ireland – the so-called ‘green lane’ – it did not go far enough for the DUP.
The creation of new trading rules – which will be formalised by fast-tracked legislation due to be introduced in Parliament today (1 February) – will see the power-sharing executive at Stormont, Northern Ireland’s devolved seat of government, restored in the next few days.
