Checks on imports from the rest of the world could raise food prices and jeopardise ‘just in time’ supply, while spreading risk across shipping lines and ports is helping suppliers take control, Festival of Fresh delegates told
Importers of produce from the rest of the world that could face 100 per cent checks under the new EU reset deal and SPS agreement have been urged to consider the impact on ‘just in time’ supply.
Speaking at today’s Festival of Fresh event, held at G’s in Barway, CEO of the FPC, Nigel Jenney, issued a stark warning to importers and suppliers to consider the reality of delays on phased delivery to customers.
He pointed out that a successful policy to ease global trade of fresh produce across the UK border is at risk, if the government aligns with EU rules to inspect rest of world produce imports.
“Because we commit to a reset, they will change that successful policy and move to a European policy that could be 100 per cent inspected at the border,” he said.
Imports from non-EU countries account for around 50 per cent of total fresh produce imports, Jenney said, asking delegates to consider what new checks would do to “the just in time and phased delivery expected by your customers.”
The government is expected to release new detail about the SPS agreement in upcoming weeks, with the FPC planning to increase its lobbying across mainstream media and the industry to raise awareness.
“There is no reason why we couldn’t maintain the current position. We are protecting Europe by default through the customs union,” Jenney continued.
“If we continue with a politically-led reset, without looking at the fundamental long-term consequences, the government is knowingly driving food inflation,” he said. “This will cost us as consumers £300mn a year because they’re not costs the supply chain will be absorbing.”
Spread risk to mitigate geopolitical turmoil
Elsewhere in the panel, group CEO of banana importer SHP Group, David Bateman, explained how the company’s strategy of contracting multiple shipping lines and ports has provided resilience.
“We import from seven countries in the tropics, we use four or five shipping lines, and the same number of British ports. For most of what we buy, we stay as close to the supply chain as possible,” he said. “You have to control as much of the supply chain as possible, to counter higher costs.”
Bateman also revealed the company has expanded its ripening capacity in the UK from three days to five, at a cost of £5 million. “These are big decisions that we’ve had to make to maintain that resilience,” he said.
Geopolitical unpredictability, including the recent conflict within the Gulf, has led to congestion within the shipping industry, according to the Port of Dover’s head of business development, Alison Hall.
“What we’ve seen in the context of the Gulf, those ships are getting delayed more and congestion is happening in the bigger ports,” she said.
“Fresh produce is remaining in the European ports rather than UK ports,” she continued, pointing out that some companies, including SHP Group, have taken control by spreading risk across different shipping lines and ports.
The Port of Dover has mitigated some rising costs among its own operations thanks to achieving net zero status for its scope 1 and 2 emissions, the first UK port to do so.
“Where that’s benefited us is the rising fuel prices. We’ve taken control of that by having solar to mitigate some cost bases,” said Hall, adding that the direction of travel on net zero and environmental momentum from government is “unclear”.
