Seafood firms will need extra government funding to remain afloat as the sector continues to battle post-Brexit chaos, industry figures have warned MPs.
Speaking in front of the Environment, Food and Rural Affairs Committee yesterday (2 March), representatives from trade bodies and business also called for government to urgently open dialogue with the EU to resolve the border crisis.
Seafood Scotland’s CEO Donna Fordyce told the Committee “companies can’t see a future” as firms exporting seafood to the EU were facing extra costs of up to £500k a year relating to the paperwork alone.
Fordyce warned that not only did the supply chain not have the profitability to absorb these costs, but businesses faced losing out to other markets due to the reputational damage caused by deliveries taking up to 39 hours to reach customers, compared to an average of 22 hours pre-Brexit.
“Customers are finding other supply chains. [For example] the Norwegians are all over salmon. And this will be a long-term loss. How do we regain these markets? Their trust? And the price we received for the product? Quality and freshness isn’t perceived to be there because of [products arriving late],” she said.
Fordyce called on government to provide extra short-term funding, particularly for processors which had thus far been missed by the government’s £23m compensation scheme and had been forced to mothball operations.
This call was echoed by co-CEO of Shellfish Association of Great Britain, Sarah Horsfall, who told MPs she had already seen a couple of firms close down and that running a profitable business was “impossible at the moment”.
What’s the solution to the seafood sector’s export crisis?
Horsfall also said figures within the shellfish sector had criticised the £23m support scheme for “compensating the incompetent” as the money had gone to businesses which had not prepared for post-Brexit measures as much as businesses that had.
While suggesting most export “teething issues” had been resolved, fishing firm Waterdance’s senior manager of fisheries & quota, Martin Youell, warned “at least 80%” of systemic issues remained in place, with the paper-based system being a particular source of difficulty for firms.
Youell urged the government to open up talks at the “highest political level” to negotiate the digitalisation of the system.
“It must be in the UK government’s interest and the EU Commission’s and member states’ interests to have an efficient system,” he said, pointing to the example of Iceland, which has a more streamlined customs system with the EU.
According to Youell, the disruption caused by Brexit had led to the number of EU buyers at Brixham market falling by 40%, with prices also dropping to lower levels.
For example, Dover sole was selling at £3 per kilo more on Belgian markets compared to Brixham – a differential Youell said had remained in place and suggested could attract vessels to land their catches directly into Europe.
It comes after the Scottish Salmon Producers Organisation revealed the sector had incurred losses of at least £11m since the UK left the EU in December, owing to border chaos.
The trade body said its members had been forced into delaying the harvest of 700 tonnes worth of fish due to difficulties exporting product.
However, there was some positive news for the sector after the Scottish seafood taskforce was reported to be “heading in a really positive direction” by Seafood Scotland, after meeting for the second time last Friday (26 February).
Seafood ‘sticking plaster’ is welcome but it’s not the only sector that needs post-Brexit support
In the same Efra Committee hearing, MPs also heard from representatives of the meat industry who echoed the concerns of the seafood sector that it was becoming financially unviable for small firms to continue to export to the EU.
The meat industry criticised documentation requirements and also called for greater uniformity in the application of customs regulations by border control posts.
“The system is flawed. There’s between 125 and 150 separate technical issues that have had to be sorted out in the first eight weeks of this system running,” said British Meat Processors Association CEO Nick Allen.
“It feels as though we’ve stepped back into the 1950s. We’ve got lorry drivers driving around the countryside with huge quantities of paper. In this day and age, surely we should be able to digitalise this?”
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