Thread by @ColdChainShane

I’m late to this, but here is a🧵about just how non-trivial the #sausagewars / wider #NIProtocol food supply issues are. At its core is an illustration just how far down a rabbit hole we are and how poor our understanding of what 'freedom to trade' actually means in practice 1/

Reminder @ColdChainFed represents logistics businesses. our members’ job is to get product from A to B, the more freely they can do that, the more responsive the market is to demand, the more open the market is to competition and the lower the cost of goods is to consumers. 2/

So far we have not seen the full effects of the NI Protocol because (a) gov secured and extended massive temporary concessions for ‘supermarkets’ from the rules and (b) the hospitality trade in NI has been coincidentally shut for 6 months since the protocol came in to being. 3/

Nowhere near enough is made of just how completely unfair having one rule for the big supermarkets and one rule for everyone else actually is. There are logical reasons for why this was deemed expedient at the start, it was basically an 80:20 calculation. 4/

Supermarkets are the largest GB->NI traders, and they have more control of the end-to-end supply chain than others. They are easier to deal with (only because they have the time and resource to invest in gov engagement) and the expertise/evidence to suggest new ways of working 5/

Where this becomes more problematic is when this ‘supermarket first’ mentality extends into the development of the long-term solutions, especially the digital assistance scheme. daera-ni.gov.uk/articles/devel… 6/

Hundreds of millions is being bet on being able to streamline processes and hide the complexity of complying with the protocol / EU food rules essentially for the benefit of supply chains that look and work like those that the supermarkets operate. 7/

Here is an illustration of what I mean – note the importance of the funnel (or consolidation point) in the product flow. That is painstaking and difficult but doable if you are gathering together goods for one buyer (a major supermarket). 8/

You can also see how an end-to-end IT system can be built around this model because one company or agent acting for one company can control, audit and co-ordinate the flow. 9/

The problem comes when multiple companies want to buy in small, less predictable quantities. The logistics model that serves this is 'groupage'. Groupage operators make it possible to take an order for 1 pallet of product today and get it delivered tomorrow or the day after 10/

Pre-1 Jan to serve Northern Ireland it worked like this

It’s a viable business model for a haulier because they can plan to have a number of vehicles scheduled to make GB->NI trips every day/week and be confident that bookings will come in to fill those lorries 11/

Now today taking that same process and trying to make it protocol compliant looks like this – suffice to say it takes longer up to 5-7days longer from order to delivery and it costs A LOT more. 12/

It is also rife with uncertainty – if customer B doesn’t get their paperwork right, on time it will mean everyone else is delayed or turned back at the border. The haulier has an obligation to customers A, C. D and E. How will they be compensated? will they stay as customers? 13/

The government has proposed two solutions. One is the hub model – i.e everyone in the chain sends their goods to a consolidation hub in GB before the Border and all the certification is co-ordinated there, the vehicle is sealed and it goes through the border. 14/

This essentially means that the ‘everyone other than the supermarkets traders should restructure their model to look more like a supermarket supply chain. To set this up requires investment - a dedicated facility, vets, systems changes and above all well-informed customers. 15/

The alternative is the sequential model, so rather than having a physical hub location, there is a co-ordinated process of sealing goods at collection. This is attractive because it looks more like groupage BUT it is still fraught with interdependencies to make it work 16/

In both cases businesses are asking themselves is there enough volume available to make this a viable investment? Will customers make long term commitments to use this type of operation? Will they understand and co-operate enough to make it work? is it really worth the hassle?17/

And if so how many competitors can offer this service to market viably? Far from being solutions that give traders confidence they essentially force business to work within an expensive trading strait jacket that could start out as, or very quickly become, monopoly operations 18/

I hate to say it but I fear that the models proposed so far do more to shift the problem away from the Border, make it conveniently less visible, and reduce the burden on border inspectors, than then really do to give those traders confidence to start back up. 19/

Everything about this has one overriding effect it reduces ability and willingness to trade. A lot of this lost confidence has been hidden by covid, especially in hospitality trade, but now as we look to recovery the effects are going to bite and the unfairness’s are obvious. 20/

There is an alternative. There are ways to allow much easier trade flows, but they require pragmatic concessions at source. We need a robust agreement that food rules are ‘equivalent’ (UK word) or ‘aligned’ (EU word) or if expedient pick any another word 21/

It can and should be a dynamic agreement that varies as food rules vary in the two independent trading blocks. It would apply product by product, giving more freedom to exclude products that diverge from equivalent/aligned standards. It would be a sovereign choice to do this. 22/

If this can be agreed it removes processes rather than digitises them - it reduces the burden and scope of the £multi-million IT system. It reduces the risk of stacking the market in favour of the biggest and best resourced. 23/

Far from limiting options for UK businesses it would create real tangible freedoms to trade. It will encourage confidence and defuse tensions.

It's the right thing to do.

#NorthernIreland #brexit #SausageWars