Thread by @pmdfoster

🚨🇬🇧🇪🇺🐠🦴🦮🐈‍⬛🇪🇺🇬🇧🚨UK pet food industry hurt by Brexit checks and red tape - a story that illustrates clearly why SMEs are facing structural not teething problems - stay with me /1
on.ft.com/3kiBx7N

Not another #Brexit red tape story, I hear you cry, but I'm afraid the story of pet food industry tells a thousand other stories of small businesses dealing with the Brexit border. According to @UKPFMA trade body, two thirds of members that tried to export have failed. /2

@UKPFMA Let's take one story - a Doncaster-based fish food manufacturer that uses proporietary tech to make high-end fish food (yes, it exists)..they sell to aquariums around the world, to USA, China, UAE. They are used to exporting, indeed they are good at it /3

@UKPFMA But as Peter Kersh, boss of World Feed Ltd tells me, they have only managed a single export attempt to the EU/EEA since Jan 1 - a £10k test pack for a salmon farm in Norway. Sales of approx £800k-£1m a year ride on this working /4

worldfeeds.uk

@UKPFMA But there was a screw up. Mr Kersh says paperwork was all in order, but the haulier failed to declare the product at the BCP in Gothenburg Sweden. When it reached Oslo it was impounded and is very like going to have to be incinerated.
SO....what does this tell us? /5

@UKPFMA 1. Mistakes happen: even if your paperwork is in order, there is a basic screw-up rate with all customs stuff because it's so complicated. That puts UK companies at a perpetual disadvantage because those Norwegian salmon farms will find EU single market supplier more reliable/6

@UKPFMA 2. Exporting to the EU is much harder than exporting to the US. Mr Kersh does that regularly. He puts the pallet or two in a container to New York, it take a week or two. Arrives. Pays duty and is shipped to client. Simples. It works. NOT so the EU. Why?

@UKPFMA 2a. Because the EU is web of countries and EU trade is a web transit, logistics and hubs that make it much more complex to move goods across as a third country. So before Mr Kersh just loaded his pallets onto a truck, raised an invoice and sent it into the EU. NOW? /8

@UKPFMA 2c. He needs a vet to raise an export health certificate, to enter the goods into a manifest for entry into EU - but for that he needs vehicle registrations, routes of travel etc that the logistics companies can't often cant provide. That's not how it works. so he's stuck/9

@UKPFMA 2d. Even when the system 'works' tiny things screw it up. For example the EHCs need to be in all languages that goods transit through in number-page sequence. But they come in series, numbered p1-4, then p1-4. But the second country of transit needs p5-8. etc Arrrrrrrrrrgh! /10

@UKPFMA 3. These agonies make UK companies harder to deal with and less competitive than their EU single market rivals with equivalent products. It also raises costs to UK SMEs, even v clever ones like World Feeds, that cannot be passed on to EU customers for UK co's to be competitive/11

@UKPFMA 4. They also make small companies like World Feeds a liability to hauliers/logistics companies who don't want risk of their lorry getting stopped, which is much more likely for products of plant/animal origin /12

@UKPFMA 4a. So Mr Kersh tells me, since Jan 1, he cannot find any haulier/freight forwarder to shift his gear. He has a colleague working on it full time. No-one is willing to take a pallet or two. The so-called 'mixed load', the bread and butter of EU logistics, is now risk bucket/12

@UKPFMA 4b. So as @RHARodMcKenzie tells me “When it comes to customs, groupage is the toughest nut of all to crack. It’s a big headache for all businesses that can’t fill a whole truck. For these smaller businesses, the red tape becomes a nightmare.” /13

@UKPFMA @RHARodMcKenzie The fear is that many smaller businesses - like the one that replied to the @UKPFMA will stop bothering. "The level of detail required is disproportionate to the benefit of exporting. Being asked to supply farm postcodes and kill dates...is a non-starter.” /14

@UKPFMA @RHARodMcKenzie The wider point here is that some of these processes will get smoother, but fundamentally a lot of this pain is now baked in, and it is hurting SMEs like World Feeds Ltd who are getting increasingly desperate. The EU represents 35 % of Mr Kersh's business and a opportunity /15

@UKPFMA @RHARodMcKenzie That Norway food consignment was a test - it's clever food that feeds 'cleaner' fish in salmon farms (they eat the lice on the fish to avoid chemical usage) but the salmon don't eat the cleaner-fish food that sits in a lump in the cage. Who a thunk fish food was high tech! /16

@UKPFMA @RHARodMcKenzie This is a good little UK exporting triumph story, and #Brexit is making things very hard. @DominicRaab saying take a "ten year view" makes Kersh seeth. "“Raab comes on the telly and says ‘take a 10 year view’. F*** me, we can’t managed 10 days ahead, let alone 10 years”./17

@UKPFMA @RHARodMcKenzie @DominicRaab What drives him doubly nuts is this idea that #Brexit somehow makes it easier to export to the rest of the world? Like there was a million opportunities out there that were blocked to UK firms be EU membership and are now unlocked by #Brexit. /18

@UKPFMA @RHARodMcKenzie @DominicRaab He finds it one of the weirdest fallacies of this entire experiment, that #Brexit somehow creates global demand that wasn't there - I call @DanilLoughran of Aston Chemicals (a UK world importer/exporter) expressing similar frustrations /19

@UKPFMA @RHARodMcKenzie @DominicRaab @DanilLoughran Anyways. That's the latest view from the frontline. Pet food is 'only' a £285m industry - though that's around 10 times the mollusc industry - but its a story that illustrates frustrations that are common to lots of other small producers/SMEs. ENDS