Post-Brexit trade: Give us data not dire straits
Post-Brexit trade reports have been warped by system failures. The food and drink industry is not facing a collapse in exports – in fact, the reality is quite the contrary, argues Lance Forman, Vice Chairman of the Independent Business Network and owner of H. Forman & Son.
Like most trade bodies which warned of the dangers of Brexit, The Food & Drink Federation (FDF) appeared quite happy to report this week that food and drink exports to the EU had collapsed in January, without actually questioning the underlying HMRC data.
The report claimed that exports of Scottish salmon to the EU had fallen by 98%, which seemed most odd to me. Firstly because, if Britain's single biggest food export, Scottish salmon, had collapsed almost entirely in January, we would have heard about it much earlier than mid-March, and secondly, because I know from discussions with suppliers of mine – my day job is running Britain's oldest established salmon curers – that they were exporting salmon to the continent successfully from 2 January 2021.
Rather than simply accepting the information, as the FDF appear to have done and as journalists across the board have failed to question, I contacted my salmon suppliers in Scotland to ascertain the facts of the matter. This is what I learnt:
Salmon exports have not collapsed. Indeed, the UK's largest salmon producer exported more to the EU this January than last. This was considerably more than the 2% which was reported as representing the entire industry's export sales that month.
Every month, exporters in the EU are obligated to submit import and export trade figures on a system called 'Intrastat'. This system was set up in 1993 because EU countries do not require customs declarations between them and the EU needed a system which recorded the level of trade between its members for statistical purposes. Now that the UK is no longer part of the EU, data can be collected instead through customs declarations using the "CHIEF" system (Customs Handling of Import and Export Freight) each time goods move across the border, rather than in a monthly submission.
Despite this, it has been agreed that the UK will continue to use Intrastat for the coming year. According to my sources, when businesses attempted to submit Intrastat returns in January, the HMRC system was down – presumably being adapted to our new post-Brexit situation outside the EU. This means that the export trade figures for January are completely meaningless and the only way to establish the true figures is through CHIEF or directly, via industry bodies.
In the case of Scottish Salmon, because the industry is so concentrated, few members represent the entire industry. Therefore it should not take long to establish the correct picture from the Scottish Salmon Producers Organisation.
Certainly as far as salmon is concerned, and most likely with other food and drink exports, we are likely to find that Brexit has not had the dire effect that the Brexit naysayers appear to hope for. Indeed, we will find British food exports are moving, despite extra burdens and paperwork. It's clear that consumers on the continent do still want Scottish salmon, at the very least.
One amusing aside to my conversation was to learn that the French are quite partial to Scottish salmon, not only for its obvious gourmet and nutritional benefits, but they also seem to believe that supporting Scottish produce may help poison relations with England. Maybe that was poisson? Fishy, whichever.
