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Just-in-time food supply chains won’t survive being thrown in at the Brexit deep end

The UK is not as ready as it should be for the end of the Brexit transition, and it’s hard to see how the current lean, just-in-time meat and dairy supply chains will survive, says Shane Brennan, chief executive of the Cold Chain Federation.

A vet, a vet, my kingdom for a vet.

 

After four years of rows, false starts, and lots and lots of hard work, Brexit is about to become a reality.

 

I regret that, not for the want of effort on all sides, we are not as ready as we should be for the end of the Brexit transition.

 

We may have had four years to prepare for this, but I would still characterise our position today as having tried a number of ways to learn, we have decided that the only way we are going to swim is to dive into the deep end and back ourselves not to drown.

 

For those of us with a particular interest in the food supply chain, the issue of how we export and import meat and dairy products is the top immediate concern, and within that the key issue is the availability of vets.

 

Vets are crucial to the process.

 

Cross

 

Any meat or dairy product, whether it is fresh, frozen, processed or an ingredient, cannot cross the border into the EU (or Northern Ireland) without an export health certificate (EHC).

 

Every EHC must be ‘wet stamped’ (i.e. in person) following an inspection by an official veterinarian.

 

This is a familiar process to anyone that currently sends meat and dairy goods to non-EU markets.

 

We require 30-50,000 of these third country exports to be certified a year.

 

Defra estimates that the volume of EHCs required will increase to c.300,000.

 

It is hard to verify whether this is accurate or not, but industry experts suggest that this is likely to be an underestimate, and here is why.

 

Sell

 

It’s not just that we sell a lot more meat and dairy to businesses and consumers in the EU than we do to the rest of the world, but the type of products we sell, and the way we sell them are very different.

 

If you visualise a meat export today, it tends to be a shipping container full of a single frozen product.

 

The lead times are 6-8 weeks. A 2-3-day delay getting a product ready to go is manageable (if not ideal).

 

A business can work around when a vet can get to them to certify a load.

 

A meat product transported by a UK business to Ireland or Belgium today, can go from order to delivery in 18-24 hours.

 

There is no margin for delay in that supply chain.

 

Destination

 

Also, long distance trades like this are usually being sold wholesale to an importer who is onward selling to a series of customers in the destination market.

 

It’s a single product to single customer transaction.

 

There is invariably much more complexity when moving goods between the UK and our closer EU neighbours.

 

There are differences in what is being sold, to who, and for what purpose.

 

It could be a supermarket lorry loaded with cages of product to replenish supermarkets, or a series of fresh meat deliveries to restaurants, or unfinished products crossing backwards and forwards across the border as part of a manufacturing process.

 

It could all start from the same consolidation point, or it could be assembled by a series of pick-ups at various locations around the UK.

 

Every scenario requires a different combination of certificates and inspections.

 

Given this exponential growth in complexity, vets are going to be in demand.

 

Awash

 

As any farmer can tell you, we are not exactly awash with qualified vets to start with.

 

In 2019, the British Veterinary Association reported there was a 12 per cent shortfall in vets in the UK.

 

More importantly, very few vets are full-time employed in export health certification.

 

If they are qualified to certify EHCs, they tend to do this alongside their full-time job on farms or in domestic practice.

 

So, when the Government says that the number of qualified vets has doubled from 600 to 1,200, it does not feel that reassuring.

 

‘Isn’t it pretty late in the day to be raising this? And why haven’t you made plans to prepare for this?’, I hear you say.

 

Well, we have been raising it throughout the past four years and there is quite a lot of revisionism going on about how the expectations of business in this area have changed.

 

Perception

 

For most of the past four years, the UK Government has encouraged a perception that this type of ‘friction’ would be removed through a trade agreement.

 

Even now, I come across people in industry and the vet community who believe a last minute deal will remove the need for EHCs, and few businesses have been able to make the kind of changes necessary to gear up for this disruption to established ways of working.

 

UK businesses that rely on being able to export goods to the EU have been the inconvenient problem of Brexit from the start.

 

It is not as exciting or convenient to talk about how we keep the trade we have.

 

The other irony is that in all the talk of ‘taking back control’, this part of our new future is one where we cede all the control we currently have over our supply chain to authorities over whom we have very little influence.

 

We must follow their rules and, at least for now, we have little opportunity to influence them.

 

Survive

 

It is hard to see how the current lean, just-in-time, meat and dairy supply chains can survive.

 

The effect will be a move to slower supply chains, more consolidation points on either side of the new borders and less cross border integration of our manufacturing and retail supply chains.

 

As I said at the start we are going to dive into the deep end. We won’t drown. We will learn to swim.

 

In time, new ways of working will establish, channels of communication between regulators will open up and innovations will emerge, but like any novice swimmer in at the deep end, we are going to flail around for a while.

 

Shane can be found tweeting at @ColdChainShane

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