Compensation Needed for Scotland’s Food and Drink Businesses

Rural Economy Secretary Fergus Ewing (pictured) has urged the UK Government to provide compensation to Scotland’s beleaguered food and drink sector as a result of the current trade issues.

The sector is currently facing a series of challenging impacts as a result of the Brexit deal establishing new non-tariff barriers.

This is compounded by the coronavirus (COVID-19) pandemic affecting both national and international trade, with hospitality supplies essentially suspended due to restrictions. 

The seafood sector has been particularly hard hit with companies having little time to put in place new business practices to export to the EU and Northern Ireland and difficulties understanding new customs and export certification processes.

In a letter to the Secretary of State for the Environment, Food and Rural Affairs George Eustice, Mr Ewing said:

“As I had feared, the relationship negotiated by the UK Government is having a catastrophic impact on Scotland’s food and drink export industry.

“The situation has slowly progressed from bad to worse and it is imperative to understand some of the impacts.

“As soon as the Implementation Period ended, customs systems failed and prevented exports. Fresh and live product became stranded or delayed.

“Orders went unfulfilled causing reputational damage.

“High value product lost value making the exports pointless.

“Thousands of pounds of Scotland’s finest seafood was spoiled.

“We have been advised that some Scottish fishing vessels have landed fish in Denmark to avoid the Brexit bureaucracy and red tape. 

“We learn of some business having been lost to other suppliers. 

“That some fishermen have decided to suspend their fishing for fear they cannot sell their fish. 

“Market prices have fallen by 50% or more in some cases.  

“The HMRC IT systems do not recognise types of Scottish fish and won’t accept them in their system of paperwork.

“It is the UK Government who refused the industry request for a six months grace period in which these untried systems could have been worked out and problems solved without commercial loss. 

“It is incompetence in the extreme to fail to follow such an approach when the systems and paperwork are so complex.

“Ultimately it is the UK Government’s choices which have resulted in these impacts.

“Scottish stakeholders called for the UK Government to commit to bringing forward a package of financial compensation for producers, processors, manufacturers and distributors who encounter losses as a direct result of border or market disruption and, having spoken to business representatives from across Scotland, I second their request and I am writing to demand that you set out urgently how Scotland’s exporters will be compensated for their losses both in the short term and the long term caused by reputational damage. “