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Rules of origin and the possible effect of Brexit on the food and drink sector

Man looking at two bottles of olive oil food labelling Print publication

18/04/2018

The European Commission has issued a Brexit notice to food business operators regarding the legal repercussions of the UK leaving the European Union. The Commission warns that EU food law may cease to apply to the UK from 30 March 2019 onwards. The consequences of this may include that labelling on food sold in EU markets will need to change, that food business operators, authorisation holders and/or their representatives will need to be established in the EU, and that import of food from the UK into the EU may be prohibited (unless certain requirements are met).

Food labelling

EU food law harmonises the labelling of food placed on the EU market, including regulations on food information, nutrition and health claims. Changes may be required due to the UK being a ‘third country’ as of the withdrawal date. These may include mandatory labelling of the name and address of the importer of the food from the UK, mandatory labelling of the origin of the food product and the removal of the ‘EC’ abbreviation from the health or identification mark.

Establishments in the EU

To comply with some aspects of EU food law, the food business operators, authorisation holders and/or their representatives must be established in the EU. For example, according to the regulation on genetically modified food and feed, the applicant for an EU authorisation or his representative must be established in the EU. As of the withdrawal date, any food business operator in the UK will no longer comply with this requirement and therefore, as it stands, will not be able to obtain authorisation to sell genetically modified food into the EU. UK operators may have to establish satellite offices in the EU in order to obtain the necessary authorisations.

Food production and food hygiene rules

There are many rules and regulations relating to food production and food hygiene which will need to be considered before the UK withdraws from the EU. For example, the importation of irradiated food from the UK will be prohibited unless certain requirements are met as will food of animal origin. None of these obstacles are insurmountable but they need considered attention.

Rules of origin

A new report commissioned by the Food and Drink Federation (FDF) – “Rules of origin in an EU-UK FTA: A ‘hidden hard Brexit’ for food and drink exporters” warns that the UK’s food and drink manufacturing sector could face tough conditions once the UK leaves the EU as a result of rules of origin.

The report by the FDF reveals that due to the international nature of food and drink manufacturing, many UK producers have built supply chains within the EU’s single market which may fail to comply with future origin requirements. Manufacturers could face the prospect of either a costly restructuring of their supply chains or in effect barring from future EU-UK trade as a result of the tariffs which are prohibitively high for food and drink. The report goes on to suggest eight practical recommendations that the UK and the EU can take to minimise disruption to the trade in food and drink.

Ian Wright of the FDF said “Rules of origin are a big piece of the Brexit puzzle for the food and drink industry. If we fail to secure sufficiently generous rules as part of a preferential trade agreement with the EU, food and drink manufacturers will be the ones who suffer this hidden hard Brexit. They could be facing an increase in exporting costs, or a complete ban of entry to the market. This report is essential reading for those who want to avoid both.

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