Friday 11 December 2020

Goodbye to all that

The beft British cheefef are on sale at Lidl; pandemic notwithstanding, the Deluxe shelves are once more groaning with Europe's finest foods (until Christmas, that is). Lidl's 'surprise and delight' strategy pulls in the shoppers, looking for some outstanding food at supermarket prices. And among the jars of French duck pates and huge slabs of Gran Padano cheese, look at this - handmade vintage (18 month-old) Cheddar in wax, and mature Blue Stilton.

And what taste! And what a price! The vintage Cheddar was 20 złotys (£4.11) a block (400g); the mature Stilton was 22 złotys (£4.53) a wedge (454g = 1lb). Lidl's own-brand Valley Spire vintage Cheddar has become a year-round staple, but it is only 14 months old and costs slightly more per kilo.

[Cheddar comes in five flavours - mild, medium, mature, extra mature and vintage. The first two are forgettable, the mature and extra mature entirely OK, but the vintage is gum-tinglingly excellent.]

One way or another, this could well be the last time we see fine British cheeses on sale in Poland in a mainstream retail outlet. Brexit is looming, and even if some kind of a free-trade deal is agreed by this Sunday, it is unlikely that British food could find its way onto Polish supermarket shelves. Because the UK is leaving the single European market and the Customs Union on 1 January, new regulations will come into force ending seamless trade between Britain and the Continent. And if no deal is reached, and the UK crashes out on default terms dictated by the World Trade Organisation, customs tariffs will be imposed. In the case of cheese, one Polish exporter told me, this could be up to 75%. And Lidl won't even bother trying to sell 400g blocks of vintage Cheddar for 35 złotys (£7.20) to its customers.

Let's assume there is agreement, and there is a free-trade deal. At the moment, a freight forwarder taking a consignment of goods from the UK to Poland or vice versa needs just two pieces of paper - an invoice and a transport docket. After 1 January - even with a deal - this will go up to 11. An additional nine procedures will be required. Much of this will be doable online, the problem is that on the UK side, ten new IT systems have to be up and running perfectly by 1 January. That's in 20 days' time (11 working days in the UK because of Christmas).

For this reason, many freight forwarders have announced that they will stop sending goods across the Channel by the end of next week. They don't want the risk of having consignments turned back at the border because the paperwork is incorrect. Insurers don't want to insure loads due to arrive in the UK after 1 January.

In the best-case scenario, there will be a few weeks of chaos at Dover, after which those exporters who can be bothered to deal with all the new red-tape (and its knock-on costs), will find their way back to doing profitable business. Maybe the cost to British cheesemakers of conformity with EU regulations which currently apply only to cheesemakers from outside the EU will be too high, and they will lose this market of 450m wealthy consumers. [When did you last see - in Poland or the UK - cheese from outside the EU? I remember Canadian mature cheddar only from childhood.]

In a worst-case scenario, all those extra red-tape and regulatory costs will still be there, but with WTO tariffs on top. Which need to be worked out and collected. In the case of mixed loads, which make up most of chilled-food logistics, this will be a nightmare.

The largest firm supplying Polski skleps across the UK sends over 70 to 80 44-tonne refrigerated trucks a week; typically they will be carrying up to 250 different stock-keeping units (SKUs) - pallets of yogurt of different flavours, chilled poultry parts, trays of minced pork, herring fillets in cream - POAOs (products of animal origin) - each requiring a veterinary certificate after 1 January. Now, herring fillets in cream - do you need one, or two certificates (one for the fish, one for the milk?) No one seems to know. Like those ten new software systems, it's a work in progress. Neither the customs agent on the UK side, nor the customs agent on the Polish side can find out with any certainty.

The UK is Poland's third-biggest export market (after Germany and Czechia. Before the referendum, the UK was number two). Food is the second-biggest category of Polish exports to the UK after automotive. Yet out of the €88 billion of food and agricultural produce that Poland exported last year, only €1.3 billion went to the UK, so the total loss of such a market won't be that big of a hit for Polish farmers and food processors. But given that the UK imports around 50% of its food, and half of that comes from the EU, there could be a lot of empty spaces on Britain's supermarkets in the new year.

This time three years ago:
Half an inch of snow brings chaos to the UK

This time four years ago:
Łódź Fabryczna station opens again

This time six years ago:
Pluses and minuses of PKP

This time seven years ago:
When transportation breaks down

This time nine years ago:
Take me back to Tulsa

This time 11 years ago:
Another book launch

This time 12 years ago:
Jeziorki in the 16th Century

This time 13 years ago:
Rotten weather, literally

2 comments:

White Horse Pilgrim said...

In a few years' time, chapters of economics books will cover analyses of the self-harm that the UK was manipulated into voting for, and how much Boris et al worsened this out of hubris.

I remember travelling from Romania to the UK by road in the 1990s. The passing scenes went from poor via less poor (Hungary), comfortable (Austria), affluent (Germany), comfortable (Belgium and France) to less than comfortable (the UK). Such is life at the edge of a bloc. And now the UK is outside and separated by water. Just as connected Hungary and Romania are rising, the distanced UK will fall. And, with our financial industry marginalised, who will pay the extra taxes needed to fund Covid and so-called 'levelling up'?

One bit of good news for Poland. My excellent and hardworking Polish neighbour will be returning. His employer is closing (the Honda factory - our local Brexit dividend) and the UK is (he reports) becoming steadily less friendly. I'm sure that he will prosper and add value to Poland.

Ian said...

I remember the days when cheddar was something you had to hunt down and even then it was at best bland. Trips to the UK meant buying up cheddar, amongst other items so looks like back to that whenever travel returns.

In the meantime enjoy the last of the imports!

Another thing to add to the list of Brexit 'benefits'.