SCOTTISH traders have warned there are still huge unknowns over the impact of Brexit on prices and supply chains, despite the disaster of a No Deal being averted.
While the last-minute Christmas Eve deal with the EU avoided businesses facing large tariffs, there are still major concerns over the effect of extra checks and paperwork.
Ahead of the transition period coming to an end last Friday, many said they were still waiting on crucial details of how new systems will work.
Colin Smith, chief executive of the Scottish Wholesale Association, said it was “good news” that a deal meant the threat of tariffs on key food and drink exports has been averted – but also warned prices could still rise.
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Tesco chairman John Allan said any changes to food prices are likely to be “very modest indeed”.
But Smith said: “There is much detail to be pored over and businesses importing fresh products and ingredients are understandably concerned about the prospect of increased admin and paperwork which could have a knock-on effect on the UK supply chain, reducing choice for shoppers, and increasing costs too.
“While some major supermarkets have already declared that they are able to absorb these ‘new’ costs, due to the volume of stock they import, wholesalers and their suppliers importing a pallet or two of chicken or bacon, for example, have the same fixed importing costs as they would a container.
“One SWA member estimates that custom charges could add 1.5% to their costs of goods.
“Wholesalers operate on net margins of only 1.3% – these additional costs can’t be absorbed by the wholesaler and have to be passed on in higher cost of goods, creating a new level of disparity between the wholesale sector supplying independent convenience stores and the multiple operators.”
Martin Morgan, executive manager of the Scottish Association of Meat Wholesalers, said the industry was still seeking clarity on various specifics of the deal. “We still don’t know if we will be treated as a third country which has no health status comparable to the EU,” he said.
“In which case you will have to certify products are free of various diseases depending on what it is – which is going to require more paperwork, more input from a private vet, so more cost and more hassle.
“It’s good to have a deal but there are still issues which have to be spelt out to us so trade can kick off in the New Year on a firm footing.”
He said many people had fulfilled orders in advance of December 31 to make sure produce reached its destination, but said there was likely to be delays especially in the initial stages.
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“What was 100 products a day going across from one factory might slow down to five or ten – it could be of that scale,” he said.
Elaine Whyte, executive secretary of the Clyde Fishermen’s Association, also said many of the details still had to be “pinned down”. “We do know we aren’t having tariffs – which is a massive relief,” she said.
“We are still going to have extra paperwork – but the lack of tariffs is important as it would have spelt the end for a lot of our shellfish communities.
“In terms of what happens after five years, we don’t know. They are talking about a gradient scale which goes down in terms of access – we may see tariffs come back as an issue then. So much will depend on the implementation.”
