About 40,000 pages of forms to fill in per week, trucks turned back because they are sometimes filled in with the ‘wrong coloured’ ink, and debates over the dairy content of chocolate chip cookies. M&S’s chair starkly sets out his concerns about EU trade rules enforcement in the island of Ireland in a letter to Brexit minister Lord Frost

Marks & Spencer storefront

Marks & Spencer is one of the largest UK-based retailers operating in Ireland as a whole and plays a disproportionate role in Northern Ireland. 

We are a major employer and investor with over 4,000 people employed directly, and many more in our supply chain. Last year we invested over £10m in the business.

However, the issues we are facing as a direct result of the current customs arrangements and compliance regime to the Republic and, in all likelihood in the North are very threatening to our business.

It is not the overall purposes of the Customs Union that are the problem. It is the pointless and Byzantine way in which the regime is enforced that is so business destructive.

The point about the current arrangements is that they are totally unsuited and were never designed for a modern fresh food supply chain between closely intertwined trading partners.

Marks & Spencer foodhall 1

They serve no purpose in terms of food safety and customer protection. 

M&S food standards are amongst the highest in the world, and we are prepared to comply in every way with EU requirements if required. 

The experience on the ground is far worse than the theory of the rules. I thought it might be worth sharing some of the Kafkaesque bureaucracy we are facing.

  • As soon as an order is placed our suppliers have to manually input information on each and every individual order to comply with the EU Traces scheme – for example batch code, sell-by date - core product information. It would not be unusual for us to send several orders to a supplier every 24 hours as forecast demand evolves. For our suppliers, this data entry requires two to six hours per order. It is important to note that nothing useful is done with the data.
  • When products arrive from our suppliers at our Motherwell depot for despatch, independent vets have to conduct SPS [Sanitary and Phytosanitary] checks on every product of animal origin on every truck. Bear in mind that would include very benign product like cream or butter in a sandwich and in most cases veterinary inspections are already required in the supplying factories; that is up to 650 products per truck on 55 trucks per week – 165 in our busiest weeks when the North is impacted. This operation requires five full-time vets that we fund who spend six hours per truck. When the North comes into play that rises to a requirement for 13 full-time vets on-site and about equivalent 1,500 multi-page certificate manifests per week.
  • The SPS checks themselves are over-zealous and bureaucratic. For meat there are 15 different types of Export Health Certificates – with one required for each component part of a composite product so a ready meal for instance or sandwich may require multiple certificates: each requiring veterinary sign-off. For plant-based products we have to provide APHA [Animal and Plant Health Agency] with 48 hours’ notice to conduct the horticultural product checks. This is just not workable in a fast-moving modern food business; more often than not, the notice required on fruit and vegetable certification is longer than required to harvest product from field to deliver to shelf edge.
  • For our products to clear the Border Control Posts at EU ports, we are required to give 24 hours’ notice other than to Belfast under the current Derogation. Whether shipping to France or the island of Ireland, no sea crossing is greater than six hours so this is a nonsense.  The system is based on long-haul, long-life shipping and does not work for markets close to the EU and fresh short-life product where we supply to continuously moving demand. If there were a tunnel it would be permanently blocked.
  • For our products to even have a chance of clearing a BCP at the destination port, our import agents have to combine all the data required through the chain – from the line-by-line information inputted into EU Traces through to the EHCs – which creates an average of eight documents of 720 pages per truck.

That is 40,000 pages per week for goods into Ireland and – from October – that will be 120,000 pages per week. One error in these documents, which can be completely unrelated to food safety – for example a typing error on an SKU code - leads to an entire truck of 650 items being refused. A system based on a zero error rate is simply unworkable; particularly one that is so heavily manual and based on human input. No auditing system in the world works on that basis and particularly when errors are sometimes in a format not germane to the substance.

cookies

  • We have had trucks turned away as agents rejected paperwork on the basis of the colour of the pen used, the position of a particular stamp, and delayed as the dairy content of chocolate chip cookies was debated. Some of this may be individual small-mindedness but it is shrouded in an officially sponsored framework of business prevention.

“Trucks are delayed as the dairy content of chocolate chip cookies was debated”

The net result of all of this is: 

Less choice for customers in Northern Ireland

Empty shelves veg

At the moment, at best, the products we can send to the Republic arrive 24 hours later into store than before and, on average, 40% of our deliveries are 48 hours or more later into store than before Brexit. 

This means 800 lines have become unworkable to deliver to the Republic – like our sandwiches, which have reduced in range from 49 to 21.

When coupled with the 500 lines that are ‘banned’ – like our free-range chicken or ‘Best Ever Burgers’ or indeed best-selling orchids – that is a reduction of 20% in range or choice.  

Poor availability

As a consequence of these labyrinthine restrictions, our available range in Dublin is running at about 75% of normal, with many shelf gaps. For our super-fresh, fast-moving lines it is even lower.

Cost pressure

Northern Ireland households have less than half of the UK average of discretionary income and the lowest levels of financial security in the UK. M&S will always put its shoulder to the wheel to deliver trusted value for our customers, but this is an industry issue. There is no other outcome for consumers in Northern Ireland in the end other than higher prices, given the inflationary pressures being put onto retailers by the regulatory regime

UK food retailers and suppliers disadvantaged, lower employment and investment

M&S is strongly supportive of the government’s levelling-up agenda and recognise the importance of private sector investment to building back better. We also want to retain our position as leading in food quality, provenance, supply chain standards and innovation. 

However, faced with the impact of the current regulatory arrangements and the likely impact in Northern Ireland from 1 October – not to mention Covid - being able to keep the show on the road, let alone growing is going to be very challenging. 

The impact will be felt up the supply chain. It is not just about ‘big business,’ it is about the artisan production and small, specialist suppliers that make the UK food industry so special.

We have already had to update the market that the costs we are facing this year are between £27m-33m into the island of Ireland, and that is before implementation of the protocol.

An environmental debacle

Brexit lorry

M&S has for a long time been market-leading in sustainability and is a strong supporter of the government’s net zero strategy. At a time when the government is rightly prioritising sustainability issues the current system is taking us back to the 70s in terms of environmental protection.

An extra 1,100 tonnes of food is being wasted every year because time delays are shortening food life. This is occurring in manufacturers, in our depots when perfectly safe wagons are rejected and in customers homes as they buy shorter coded product.

120,000 pages of paperwork being produced per week is equivalent to chopping down 10 trees per week; that is a forest a year. It is an incredible fact that despite our business working almost entirely on digital real time information the customs controls are still largely paper-based.

What can be done?

We recognise that the provisions of the EU Customs Union were designed for a different era in which slow-moving product of variable quality was shipped from overseas and digital records and checks were not an option. 

There is a mindset in some quarters that the industry will develop workarounds and the issues will quietly fade. In the time that may occur but at a cost to Northern Ireland, customers and investors. So, there is very limited remaining time for the UK government to negotiate and implement workable arrangements.

By far the easiest solution would be to agree a time-limited veterinary/food standards agreement. I understand why the government is not favourably disposed to this solution, but it is by far the best way of delivering a smooth trade flow. 

Putting this to one side we believe a combination of a facilitated movement scheme, combined with a serious long-term commitment to digitisation and a series of measures designed to deliver common-sense solutions to compliance, could make a very substantial difference.

  • Facilitated Movement Scheme

We would be happy to build on the work done by Defra, to put together a robust proposal for an adapted version of a ‘trusted trader’ scheme underpinned by statutory enforcement, rights of audit, and penalties for failure. 

Any scheme should start on the basis that we are prepared to follow EU standards for products going to Northern Ireland. The debate is not about meeting standards, this is about what we are required to do to show we are compliant.

  • Common-sense approach to compliance

In the short term, the government must ensure a more common-sense approach to the compliance regime (which is already in place in the Republic) as follows:

Brexit graphic with European and UK flags

Focus enforcement on errors that have a genuine potential impact on food safety. At the moment a high proportion of so-called errors are of a trivial nature, format based or have no bearing on safety – for instance hand corrections on a mistyped commodity code. Products with minor data areas, that are not identified by the trader as food-safety related, should be allowed still to move into the destination market. And properly authorised amendments should be allowed perhaps with subsequent verification. No system in the world works on 100% accuracy as the minimum requirement.

  • Provide scope for rectification

Where product has errors of minor designation issues, and which are not material to the wagon as a whole, they should be allowed to proceed subject to a subsequent 72-hour rectification window including, if necessary, product recall.

  • Defer the ban on EU prohibited products into NI

We believe that for political reasons alone it will be a running sore of symbolic proportions to implement a ban on much-liked chilled products into Northern Ireland. And it will be impossible for retailers to find alternative supply in the short term. Therefore, we should recognise the special place Northern Ireland has by not banning the products we cannot send to other EU markets subject to undertakings regarding onwards movement into the EU.

This is an edited version of a letter sent to Brexit minister Lord Frost ahead of his strategy announcement today.