Richard North, 02/04/2021  
 


Looking at the headline in the Guardian, I got to wondering why Scottish dogs need their own food and how they are going to manage now that their supplier has moved to France.

But then, I guess, "Scottish dog food firm relocates to France due to export red tape" might refer to the firm, not the dogs. In that case there are going to be some very happy chiens français knocking about especially, as I gather, the firm sells dog chews made from deer antlers.

The Guardian, as one might expect, frames this as another Brexit disaster story, recording how the founder of the Antos dog chew company in Ayrshire, established in 2005, has been forced to move to France after his exports to the EU were halted because of the "new" trade barriers in place since 1 January.

This is Antoon Murphy, recalling ten weeks of daily calls and emails to government representatives, who he says were "absolutely terrible". He was left to conclude that he had no other option than to relocate or face losing the business. "The trade deal they agreed at Christmas is very close to as good as no deal", he says.

From 2005, Murphy had set up and grown his business to a turnover of more than £8 million, with 19 staff. About 60 percent of his sales were across the EU and, come the end of the transition period, he was hit by a double Brexit whammy – the need for certification documentation and the reluctance of hauliers to ship his products.

The documentation was particularly problematical. Not only was it a £200 extra cost for each order, whether the consignment was worth £40,000 or £500, to pay for the vets and their coloured crayons, in common with the shellfish men trying to sell unpurified LBM, a model health certificate did not exist for antler chews and any other of his unusual products.

Murphy says that his company's products "are quite niche and there is no specific health certificate for them", complaining that, "It took us about ten weeks of daily calls and emails with what he calls the "Animal Health Agency" to finally get somewhere in obtaining export health certificates for our products".

Somewhat unfairly, he dismisses them as "absolutely terrible", perhaps unaware that it is a European Commission responsibility to produce the model certificates, and they have yet to deliver for unpurified LBM. He needs to count his good fortune that he got any movement at all.

For the ungrateful Murphy, though, the correct certification provided no relief. He was confronted the perennial "groupage" problem, with not enough goods in any one consignment to fill a complete truck. No haulage firm would take pallets of his products because they deemed it "too risky", with the threat of food being checked at the border in Calais delaying the entire truck.

This determined Murphy to set up a new company in France to service all of the company's export sales. He and his wife moved to a small town east of Lyon and have set up a new business, Nova Dog Chews, to fulfil European orders. How he managed to do that without the EU's right of establishment, and freedom of movement isn't explained.

His company continues in Ayrshire to supply the UK market and, presumably, send bulk loads to Europe – although this isn't stated. Now that he is distributing from this new base, he says that his European customers "are glad they don't have to deal with the UK company and more dealing with customs declarations and agents".

That - although not by any means highlighted by the Guardian - is another quite separate and quite important issue, one rarely highlighted by the British media.

With the UK outside the Single Market, importers established as legal entities within EU Member States take on the burden of processing goods through the import formalities. They take on the responsibility for paying any fees – even if they are then reimbursed by the exporters – and become responsible for ensuring that products conform with EU rules, assuming the legal liabilities for any non-compliance and consumer issues.

Murphy quite correctly states that his company's "expansion" into Europe will cost the UK. "This move will obviously mean a loss in tax revenue, jobs and investment in the UK economy", he says. However, what is not said is that his actions will ensure that, as far as his company is concerned, export volumes will hold up.

Thus, the Guardian has unwittingly recounted a success story – of sorts – illustrating the resilience of businesses when confronted with the Brexit challenge, mirroring the option taken by The Wetsuit Company, which has opened up a Dutch branch to service European customers.

We get a similar story from a climbing firm in Sheffield, which makes clothes and training equipment for recreational climbing. The firm's owner, Ben Moon, has shifted some operations to the Netherlands after "multiple difficulties" and confusion over documentation, VAT and red tape. Moon expects his new operation to become their main base to serve the EU and the rest of the world.

The BBC, by contrast, is firmly in whinge mode, indulging in its penchant for sloppy reporting by offering a confection of stories under the heading: "Businesses find 'teething problems' trading with the EU".

Top of its list is Captain Fawcett Ltd, based in King's Lynn, Norfolk. The majority of its male grooming products are exported, with 51 percent going into Europe. Director Richard Finney says the last three months have been "particularly difficult" in terms of getting products to their destination.

"We are quite used to shipping paperwork as we do that for other countries", he says, "But we found a lot of obstruction. Where a parcel normally takes two days, it's been taking up to two months to arrive in some instances".

Finney says parcels are still "stuck" in Spain, Poland and Germany. And while claiming that, "Our paperwork is correct", he asserts that he is finding that, "different countries are making their own individual requirements".

And although the BBC has already labelled Finney's issues as "teething problems", the man himself will only commit to hoping that they are, having his staff "working round the clock" to ensure things run as smoothly as possible.

However, one senses from the report that Finney hasn't really got to grips with what he is confronting. His products, on the face of it, are caught by Regulation (EC) No 1223/2009 on cosmetic products, an issue that was picked up by the Guardian last February.

Having regard to the experiences of Sarah McCartney, which we also followed, Finney might count himself fortunate that he has any European business at all. He is faced with far more than the delivery glitches that the BBC allows him to describe.

Another of the BBC's "victims" is Suffolk pig farmer Alastair Butler, but he is only recruited so that he can tell us that "things are starting to move again" after a tricky to start to the year "due to paperwork problems".

He then gives way to Steven Williamson, director of Lynn Shellfish in King's Lynn, who tells us things are "definitely getting easier". The company's first load of produce was delayed for five days, he says, but exports are now getting to their destination within 24 hours.

"We are getting our heads around it", he adds: "The EU are not taking live product, so we will have to cook all of our cockles as part of a purification process". His business, he claims, can "handle" the change, but he feels it is "more of a pain for European customers" who wants live products.

The BBC East political correspondent, Andrew Sinclair, that Brexit has produced a lot more "red tape" which the Norfolk Chamber of Commerce says has pushed up the cost of exporting by 35 percent. And yet, the problems are firmly labelled "teething problems".

Nevertheless, the thrust of Sinclair's piece matches the tenor of the Guardian and the Dutch report, to the effect that (some) businesses are gradually coming to terms with Brexit, albeit at a cost.

This is why one needs to be very careful about accepting the early trade figures, covering the first months of this year. Apart from having to unravel the Covid and stockpiling effects, there are short-term hurdles (which may or may not be "teething troubles") which some firms may be able to overcome.

I am quite willing to accept (and confidently expect) British exports to the EU to be severely dented by Brexit, but we will have to wait for a little while before we get an accurate picture of the extent of the damage.

Also published on Turbulent Times.






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