The British Frozen Food Federation has written to Defra calling for an urgent increase in the Greenland coldwater prawn quota to protect processors at Christmas.
The trade association has warned that the current quota will soon run out, forcing processors to import coldwater prawns at the full 20% rate of duty.
The industry has been cautioning that this could be the case since spring, with concerns that the quota will run out at the end of the summer or early autumn.
“The current quota ensures the UK seafood processing industry has access to a steady supply of tariff-free imported prawns at a competitive price,” said Richard Harrow, the outgoing CEO of the BFFF in the letter. “This year’s quota has almost been exhausted as post-Brexit, there is no trade agreement in place with Greenland, one of the most important suppliers.”
Harrow claimed that while a trade deal had been expected to be signed within the next six months, “this will come too late for the crucial Christmas trading period”.
Ivan Bartolo, regulatory affairs advisor at Seafish, added that while coldwater prawns could be found elsewhere, Greenland was one of the few countries with the scale to meet UK consumer demand. Canada, for example, with which the UK has a free trade agreement, cannot meet the scale required.
Without the free trade quota from Greenland, processor costs would rise and they would be unable to pass the increase on to consumers, as prices with supermarkets had already been set, according to Bartolo.
He said there were unlikely to be shortages if the deal is not signed. Instead, consumers would have swap to warm water prawn varieties (which are larger and cannot be used in the same way) or processors would have to accept some loss of profit and pay the full duty.
However, Harrow warned that processors would have no choice but to pass on the duty cost to consumers, adding that: “With the current cost of living crisis, this would be an unwelcome additional burden on all parts of the supply chain.”
Trade of coldwater shrimp from Greenland to the UK was worth an estimated £49m in 2020, according to the government, and the quota had been put in place to continue to keep costs down for British businesses while an agreement was signed.
“It was always going to be an estimate when the government set the quota and it ended up being an underestimate,” said Bartolo.
No comments yet