< Previous10 Food & Drink International www.fdiforum.net IMPORT AND EXPORT W ith the UK’s food importers and exporters continuing to tackle novel red tape as a consequence of Brexit, such as the introduction of the Border Target Operating Model (BTOM), businesses across the nation have been vocal about their concerns. Figures for 2023 illustrate a dip in exports for the country, standing at £24.3 billion, a 2% drop from 2022, with non-EU markets struggling to keep the same pace as in previous years, as noted by the Food & Drink Federation’s (FDF) end of year Trade Snapshot report. EU markets fared better, especially Ireland and Spain, but looking ahead the UK government’s proposal to extend ‘not for EU’ labelling GB-wide is likely to reverse this, threatening future export growth, raising food costs, deterring investment and consumers, and leaving smaller businesses unable to run separate production lines for EU and UK markets harmed. Concurrently, imports of food and drink increased 5.1% in 2023, driven mostly by EU markets. Going forwards, the impact of the BTOM’s phased introduction is to be seen, and has been heavily criticised, bringing extra costs and red tape for food entering Great Britain from the EU. The BTOM replaces trade rules managed by the EU before the UK’s exit, officially Concerns abound The UK’s post-Brexit approach to the import and export of food and drink is only gaining more criticism. Food & Drink International 11 www.fdiforum.net IMPORT AND EXPORT © stock.adobe.com/veneratio coming into force at the end of January with the government beginning to apply controls on animal and plant products based on their risk level (high, medium, or low). The full force of the model is being phased in throughout the year, with January seeing medium and high risk plant and meat products requiring health certificates prior to UK entry, followed by one of the most significant changes - physical checks at the border - beginning on 30 April on medium and high risk goods. A final change is due in October, with the requirement for safety and security declarations for medium and high risk imports, while a single trade window is to be brought in, slated to reduce the number of forms needed for importers. These changes will add to costs for businesses, and likely consumers, which will only be escalated further due to reviews of the risk categorisation of many fruit and vegetable products, potentially impacting EU supply chains, necessitating further border inspections, and delivering a blow to the fresh produce industry. Other concerns have arisen with the government’s ‘common usage charge’ on food imports to be introduced on 30 April (at time of writing). The fee is to be applied to some animal and plant products arriving from the EU via the 12 Á12 Food & Drink International www.fdiforum.net IMPORT AND EXPORT port of Dover or the Eurotunnel, to pay for the operating costs of border control facilities, where post-Brexit changes require extra controls and inspections, in line with the BTOM. Warnings have been given that the charge will push up food prices and deter EU producers from exporting to the UK. Across the fresh produce supply chain, industry experts predict this will add £200 million in costs. “This is simply not a manageable cost for our members,” said Nigel Jenney, Chief Executive of the Fresh Produce Consortium (FPC). “These exorbitant charges imposed by our own government represent a direct tax on businesses. It’s a move that will undoubtedly shatter supply chain confidence and is already encouraging EU exporters to reconsider their commitment to supply the UK market.” Exporters and importers are meanwhile awaiting benefits from post- Brexit free trade agreements (FTAs) to materialise and for more to be signed, with previously agreed FTAs such as with Australia having come under fire and yet to reach their potential. To improve FTAs and encourage businesses to take advantage of them, the FDF notes government must involve industry sooner, provide clear and business-friendly online guidance, and give as much notice as possible when agreements are coming into force. Nicola Thomas, Director at the Food and Drink Export Association, said of FTAs: “On paper, FTAs potentially offer our exporters trading benefits including tariff concessions, flexible rules of origin and simplified customs. However, Australia, for example, also has FTAs in place with nearly 20 other nations so these deals must translate into practical support for UK companies to ensure they are in a position to fully exploit commercial Food & Drink International 13 www.fdiforum.net IMPORT AND EXPORT opportunities - and compete successfully - in these markets.” Remaining a major target are countries like India, where FTA talks are being resumed, to make trade easier and cheaper for UK exporters and provide greater access to a fast- growing economy with a middle class expected to double from 30 million people in 2019 to 60 million people in 2030, before reaching nearly 250 million in 2050, seeing increased opportunities for British firms. Simultaneously there is demand for the UK to resume talks with Canada, after being suspended earlier in the year, where exports are falling and a failure to extend trade rules in negotiations for a new post-Brexit deal have meant new duties for Britain’s exporters. Moreover, discussions on enhanced and modern trade deals are ongoing, such as with Switzerland, Turkey, South Korea and Mexico. In addition, upcoming tariff reviews with countries including Morocco, Egypt and South Africa hold the opportunity to reduce export tariffs, boost trade with Africa and diversify supply chains. Another bright spot, which does not come without its own controversies, is the UK’s expected joining of the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP) trade group later this year. Under the deal, over 99% of current UK goods exports to CPTPP countries will be eligible for zero tariffs, while reduced tariffs on imported goods could lead to cheaper prices for British consumers on products from fruit juices from Chile and Peru to honey and chocolate from Mexico. Though there may be promise of new and enhanced trade opportunities ahead, the UK will continue to face intense scrutiny of its post-Brexit systems. © stock.adobe.com/Rawf814 Food & Drink International www.fdiforum.net SUPPLY CHAIN SPOTLIGHT A hotpot of logistical issues © stock.adobe.com/ID_AnuphonFood & Drink International 15 www.fdiforum.net SUPPLY CHAIN SPOTLIGHT T he number of factors impacting the supply chain has grown to exponential levels – from Brexit to Covid, to the war in Ukraine driving up the costs of energy and fuel, and now to the instability in the Middle East and the Houthi attacks in the Red Sea. It has never been more challenging to ship products globally. Companies have had to adapt rapidly to survive, and the most common method being used today is to invest more in technology. Part of this push towards embracing more technology – and even AI in some cases – is due to rising costs within the industry. Not only are these costs being felt in fuel, but also in labour, especially in countries like the UK which no longer has access to cheap European labour after Brexit. While full automation and removal of the human element entirely may not be possible, embracing technology within warehouses and other parts of the supply chain can drastically reduce the need for staff numbers, improving operational efficiencies. The need to use technology to boost visibility is set to be a key component in evolving supply chain strategies and essential for quick responses in a crisis. Food companies are realising the need to integrate Industry 4.0 technologies into their supply chains. Using modern software across farmers, manufacturers, logistics and delivery partners allow enhanced tracking and tracing of ingredients at any moment, across a network, and enables detailed documentation of ingredients and processes to be delivered. Tools being utilised include Artificial Intelligence (AI), Internet of Things (IoT), cloud, and automation, and real time data is facilitating the close monitoring of the movement of goods. Paired with predictive analytics, end to end visibility is enabled, and companies can forecast delays and disruptions. This additionally helps in adjusting to changes in the market and demand fluctuations. This enhanced visibility of supply chains will only become more Global economic weakness, geopolitical strife and increased conflict around the world has combined to stretch supply chains to a degree that wasn’t seen even during COVID. 16 Á16 Food & Drink International www.fdiforum.net SUPPLY CHAIN SPOTLIGHT important as companies react to modern expectations and regulations. Consumers want to know where their food comes from, how animals have been treated and ingredients have been grown, whether goods are sustainably sourced. Though some companies in the industry are restricted by legacy software and siloed operations, unable to be agile (bolstering supply chain problems across the world), many manufacturers and retailers have already set sights on gaining access to detailed ledgers that track and trace materials from farm to fork, allowing for possible problems in the supply chain to be identified, better predictions, increased food safety and easier recalls, and the potential for food fraud to be mitigated. Some companies are using continuous communication logs, with all players in the supply chain connected and exchanging data, whether that relates to cargo location, humidity and temperature readings, or inspection checkpoints. Moreover, data-driven intelligence can be leveraged in real time, to strengthen visibility, transparency, and accountability across the food supply chain. The food industry’s supply chains continue to grow in complexity. If just a single link falters, the entire chain is jeopardised. Operations, production schedules, logistics and customer experience can all be upended. After persistent uncertainty over the past few years, there is no longer room for the industry to be unprepared for delays, shortages, and disruptions. Highlighting technology such as this, the Multimodal show (covered later in this very issue) is bringing together specialists in the industry across the UK and afield to the NEC in Birmingham next month and should be a key destination for supply chain managers feeling the strain. Those operating in the UK especially cannot afford to sit back and hope things will get better given the government’s paralysis during an election year, so the only route to improvement will be to identify areas where costs can be reduced or efficiencies increased, and then invest in them. The labour problem in the UK will not be solving itself anytime soon. Food & Drink International 17 www.fdiforum.net SUPPLY CHAIN SPOTLIGHT © stock.adobe.com/Corona Borealis18 Food & Drink International www.fdiforum.net FROZEN AND CHILLED FOODS The frozen and chilled food aisles have undergone a remarkable transformation, challenging long-held perceptions and catering to evolving tastes. W hen it comes to food manufacturing and retail, perceptions have become as important as taste. For decades, frozen foods have battled the stigma of being the cast-off, budget- friendly option compared to their fresh or chilled counterparts. This perception stuck around despite efforts by producers to offer healthier frozen options, perpetuating the belief that frozen meals were more about convenience and affordability than nutrition. There also used to be a prevalent notion that freezing compromised product integrity, making frozen foods inferior to their fresh or chilled counterparts. However, the freezer aisle has undergone a remarkable transformation over the past ten years or so. What was once a limited category for options and quality has evolved into a competitive display of health-conscious and flavourful products. This change didn’t come about by coincidence, but as a reaction to the industry’s own historical and socioeconomic events. When we look back to the 2013 horse meat scandal which rocked the frozen food industry, it’s plain to see how it served as a catalyst for the extensive changes since. In the aftermath, the public gravitated en masse towards fresh and A revolution in the freezer aisle Food & Drink International 19 www.fdiforum.net FROZEN AND CHILLED FOODS organic alternatives, prompting the industry to undergo a profound evolution marked by increased traceability, enhanced relationships with consumers, and diversification of product offerings. Producers have responded to preferences for organic and locally sourced foods by offering a wider range of options, including fruits, vegetables, meats, and dairy products sourced from local farms. Growing demand for plant-based foods has led to an expansion of plant-based alternatives in both sections, ranging from burgers to dairy-free ice cream. Indulgent desserts, especially ice cream, are now some of shoppers’ main temptations towards the frozen aisle, while frozen fruit and processed meats like chicken nuggets and sausage are enjoying their own popularity surge. It goes to show how easy meals for busy families, balancing kid-friendly health and sweet treats, continue to be a E X P L O R E O P P O R T U N I T I E S - G E T H A L A L C E R T I F I E D Halal Food Authority is an industry-leading Halal Food Certification body. We specialise in Halal Certification of Food and Non-Food items including cosmetics, logistics, chemicals, additives & aromas, cleaning substances, packaging, pharmaceutical, ingredients, and much more. Our quality of work and authenticity are showcased through our international accreditation. We are accredited by EIAC and HAK (Turkiye), and also recognised by SFDA (Saudi-Arabia) JAKIM (Malaysia), MUIS (Singapore), CICOT(Thailand), KFDA (Korea), and MUI (Indonesia). www.halalfoodauthority.com - info@halalfoodauthority.com - 0044 (0) 20 8446 7127 20 Á © stock.adobe.com/LiaurinkoNext >