Independent Fisheries Consultant, Terri Portmann has warned that seafood businesses across the UK are slowly going bankrupt
Independent Fisheries Consultant, Terri Portmann has warned that seafood businesses across the UK are slowly going bankrupt due to the disruption in the supply chain caused by border control issues and has warned the UK government to stop calling the issues at hand “teething problems”.
Ms Portmann was speaking to the International Trade Committee – UK–EU trading relationship yesterday along with other representatives from the British Retail Consortium, British Poultry Council and the Food and Drink Federation.
Asked how their respective sectors are being affected by the new arrangement for EU/UK trade, Ms Portmann replied:
“I think it’s been an unmitigated disaster.
“We have already seen seafood businesses who heavily relied on an export market close their doors. Companies that have been around for 30/40 years, and I suspect that there are many more than are currently hanging on by their fingernails and going bankrupt slowly.
“Because part of the problem is that with fresh seafood products, whether it’s shellfish or fish, you can’t stockpile. And so, where other industries have perhaps been able to control their supply chain, fishing boats go to see they come in. They land their catch a certain window. You’ve got to prepare it, export it and deliver it with the right amount of shelf life. So, I’m very concerned.
“Obviously, last year we saw a huge impact on the fishing industry and again on merchants and exporters by coped. So, the cumulative impact of the new processes that have been put in place. Is really beginning to hurt and we don’t have weeks and months to think about this and get it right and getting better.”
Ms Portmann’s comments were supported by Richard Griffiths, Chief Executive of the British Poultry Council, whose members are facing a similar crisis.
Ms Portmann said the systematic problems with the new systems that were introduced on 01 January 2021 was the number of times the same information had to be replicated for the same item.
She said, “Without a doubt, and in part because these systems were unveiled very late—guidance to fish exporters was being updated on 30 December—I think it is reasonable that there were problems in the first few weeks, with people getting used to new forms and how to fill them out and the processes more generally. Without a doubt, people will get quicker, and people will get faster, but the problem is that the systems that the UK Government have built and put in place to deal with our new third country status are stand-alone systems. We have multiple systems that data has to be entered into repeatedly—the same data in many cases. Even when they get quicker and faster, the sheer burden of this new bureaucracy that we have created will mean that we will lose trade.
“A really good example is cuttlefish. If you are buying it for £2 a kilo and a vet certificate costs you £150 for your pallet, you have to add £1 of vet certificate on to it, plus your additional admin. All of a sudden, that trade is unviable, and the customer will not buy it. We have system failures in the system that we have built, and we need to start looking for better solutions now, in parallel with people getting better and quicker.”
She was asked to give her opinion based on her expertise, as to the perspective of the fishing industry, what was the experience the sector had so far regarding formalities at the border.
She replied, “I think that groupage has been most effective in the fish trade. Where you have bigger operators that are doing full loads themselves, I think there have been fewer problems.”
Asked if her experience was based on single species or multiple species, she replied that in her experience it was either. On the experience based from one seller she said:
“Yes. So, one seller sending to one buyer. A lot of companies are big enough to send entire trucks. Where the problems are with groupage—for 40 years we have built trade in this country based upon day two delivery. That means that the product leaves the UK today, whether it is Scotland or the south-west, and it arrives in time tomorrow. That is what our trade is built on. That we have gone to a day three delivery—although I understand that DFDS and others are managing to get there a bit quicker—completely throws out the window the business model of the exporting companies and the people they are selling to. Something else that I have heard recently is that in the run-up to 1 January there had been a belief within Government that customers in the EU would act as importers.
“In the case of fisheries products, that is just not happening, so the exporters also have to act as the importers and commission customs agents, et cetera, on the other side. We are now hearing a worrying pattern of a limited amount of customs agents available on the other side, who are therefore able to pick and choose their clients, so smaller operators, who perhaps are struggling the most, are getting dropped in favour of customers whose paperwork might be further along that journey of getting it all correct.
“There are real problems that we have gone to a day three delivery. That has doubled the transit time. It also means that our auctions and marketplace that are set up to run from Monday to Friday are out of sync now with the days our clients want their products on the continent for onward delivery. Those problems are only going to get worse as the quantities available for export increase. There are a lot of businesses that are not serving their customers. Those customers on the continent will look elsewhere for the product, and because of the Brexit deal that we cut—because we still have full access of the EU fleets catching the same fish we are catching—they can go and buy it somewhere else. They can buy it in the French, Dutch and Belgian markets, so it is a real problem and it is going to get worse.”
Ms Portmann also pointed out issues in the south west with foreign boats still being allowed to fish up the six-mile limit.
“Basically, in the south-west very little has changed with the fishing operation. Our boats are continuing to catch exactly the same as what the EU boats are catching, because they are fishing side by side, so when we are trying to sell to our clients in the EU they have a choice; they can go somewhere else.
“I suppose there is a longer-term worry. At this time of year, it would not be unusual to see some of the south-west netters land their catch into Brittany and Normandy to get better prices. If we get to a situation where the prices continue to slump here on the UK markets, but landing your boat into the EU is easier because you do not need all this paperwork to go with it, we have a risk that we could actually see more boats than normal choosing to land into France to get better prices.”
Asked on how best the Government could tackle the current issues, Ms Portmann said:
“The first thing that needs to happen is that Government need to stop saying these are teething problems. They actually need to understand that for the issues that are being dealt with currently by the exporters, having meetings twice a month or once a week is simply not quick enough. The systems that they have built, as I mentioned earlier, are really cumbersome. You are data-entrying the same information over and over again into different systems, and quite often that data has already been entered by stand-alone systems that existed in the supply chain before.
“For example, a fishing boat puts data into its e-log, and an auction house then sells the fish and puts information into a sales-note system. Now we have these other, stand-alone systems. So clearly the best solution is to create interfaces within those systems, or an integrated system. A good example of this, especially with regard to fishing, is that Newlyn, Brixham, Plymouth and Shetland all now have online auctions that run a system called Aucxis, or made by a company called Aucxis.
“A month ago, I spoke to DEFRA officials and told them that I thought that there was an integrated solution to reduce the burdens. And when I contacted Aucxis myself a couple of weeks ago, I was really surprised to hear that no one had been in touch. There is a company that, certainly for the auctions that are already using this system, could provide a solution— and probably not just for them; it could probably create interfaces to get into it. As was pointed out earlier, and as you will know, a lot of exporters are very small businesses. That means 10 to 20 people. Probably some of the bigger companies have 50 to 100, in the south-west. So anything that can be done to reduce the burden and therefore reduce the cost has to be part of the solution, but at the moment, I’m afraid, Government are still sticking to the mantra that these are teething problems and it is going to get better. While that is still going on, we have already wasted six weeks looking for a longer-term and integrated solution, and I imagine that other food producers are having the same problem. So poultry, meat and so on will all be struggling with the sheer amount of red tape and different systems that they have to go in and put the same information into.”
Furthering on the topic on Aucxis Ms Portmann said:
“When I reached out to them—I think I was the first person to have reached out to them—I suppose that although I think the current situation since the beginning of the year is terrible, I have been looking for solutions, since that first week. So, I suppose I am a bit Churchillian, in so much as I believe that there are wonderful, great strides that can be made when there is robust purpose behind it. But at the moment there isn’t any acknowledgement of the sheer scale of the problem and the risk of these businesses ceasing to trade. When the Government designed these systems, for whatever reason they designed all these stand-alone systems—I don’t understand why they did that. So although I appreciate that there may be a commercial market decision that can be developed, actually all that will do is fix the problem. And if you go a step further—this is probably a bit off-piste for this Committee hearing—you see that we have a really poor history of fisheries management and data collection and analysis in this country. It was a perfect opportunity to create one system that solved a lot of those legacy issues and that was more user-friendly.
“So of course, market forces can take over, but who is going to pay for it, when you have businesses hanging on by their fingernails? Who will commission a company to go and build those interfaces?” she asked.
Ms Portmann concluded by saying:
“I think there is a real opportunity. We spoke earlier about digitising the system, which, at the moment, interfaces between all these standalone systems that are being used. I also think that we need to look at our interpretation. For example, I was horrified to learn that two weeks into the new year, vets were unloading at Larkhill in groupage areas—not to actually inspect the fish that was in the box, but just to look at the label. I don’t think we need to look at getting rid of regulation per se, but we need to look at the wraparound structures and guidance that we have put in place to do this.
“Anyone who is exporting will be registered with their local environmental health office. Inspectors will be going in and out of those premises as often as they feel necessary. If the paperwork and processes are in order, they might visit once a year. Somebody who needs more scrutiny and who they are concerned about will be visited more regularly. All these health checks already happen downstream. Somehow, we have managed to put checks upstream for simple things such as looking at labels. Rather than thinking about what regulation we can eradicate, we have to look at streamlining the systems to help support export businesses and make it a far simpler process. We have heard a couple of times today about different coloured stamps on vet certificates. In 2021, the fact that we are doing that with an ink pad and a stamp is quite frankly crazy.”