Floribusiness Dutch entrepreneurs starting to fear a hard Brexit

Dutch entrepreneurs starting to fear a hard Brexit

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The Dutch horticultural industry is preparing for Brexit. Entrepreneurs are visiting Brexit meetings, Royal FloraHolland is discussing pre-clearance with the Netherlands Food and Consumer Product Safety Authority (NVWA) and flower exporters are getting certifications in place, ensuring they’ll be able to get through customs faster. If the Brexit negotiations aren’t successful, border controls will be a fact from 29 March 2019.

By Quincy von Bannisseht

The first Brexit meeting specifically aimed at entrepreneurs from the agricultural sector, attracted around 280 visitors last week. Growers and exporters gathered at Royal FloraHolland in Naaldwijk were informed about the consequences of a hard Brexit. Hans de Boer, chairman of employers’ organisation VNO-NCW, warned that that scenario doesn’t seem completely unlikely at the moment.

He based this on the conversations that he had last week with EU Brexit negotiator Michel Barnier and the new EU Council president Sebastian Kurz.

“I fear that chances of not having an exit deal in place by the end of this year are increasing. Because Brussels can’t give anything to the United Kingdom, like an exception for the freedom of movement of people. If they did, countries like Poland or Spain could come and ask for the same, which would make the entire EU house of cards collapse. The British promised all sorts of things to their electors in that referendum, which they simply can’t deliver with a soft Brexit”, said De Boer.

The chairman therefore expects either a government crisis in London, or a final British negotiating proposal that the EU won’t be able to respond to at all.

Pre-clearance

VNO-NCW and the Dutch Federation of Agriculture and Horticulture (LTO Nederland) are therefore calling upon Dutch entrepreneurs to start preparing for a hard Brexit. Some people in the horticultural industry are already working on it. FloraHolland and NVWA for example, are looking into pre-clearance options.

“You can’t put down a few halls with cooling and checking facilities right next to the ferry, so perhaps FloraHolland should set up its own pre-clearance facility and send sealed lorries onto the ferry. We’re investigating those kinds of solutions now, so that we’re prepared later on”, said Yme Pasma, chief operations officer with the auction.

Loss of turnover

Out of the € 6 billion exported plants and flowers last year, 14% went to the UK, bringing the sales value for the British market to a total of €837 million. That number has been going down, ever since the British pound plummeted after the Brexit referendum of 2016, according to Pasma.

“We’re expecting more loss of turnover and a lot of administrative hassle, when stricter customs regulations and phytosanitary checks are going to be put in place. Since we don’t know yet how high the import duties are going to be, we can’t do more than prepare ourselves for all potential Brexit scenarios.

Royal Lemkes want AEO status

Plant and flower exporters have also started to prepare. Royal Lemkes from Bleiswijk for example, is working on their application for the so-called AEO status. The AEO (Authorised Economic Operator) certificate is a certification that customs can provide to internationally operating companies. Certified companies won’t constantly have to deal with strict border controls, reducing their waiting times at customs. The AEO certificate can only be obtained after all sorts of requirements have been met.

“We decided in February that we wanted to try and get the AEO status. It has a huge impact on our company. We’ve got to complete long lists of questions and commit to certain action points”, explains Michiel van Veen, director supply chain & operations.

A team of six people, guided by a consultant, is currently working on it every day. The exporter wants to submit the application in October and hopes to receive the certificate by the beginning of 2019. “By that time, it will have cost us a year, but at least we’ll be ready for a hard Brexit”, feels Van Veen.

Product origin

Van Veen has another tip for growers who produce for the UK. “It’s important for them to know where their propagation materials originate from, because of the origin declarations that have to be completed. Are the materials from the EU? In that case, it’s relatively simple. If they’re from outside the EU, more paperwork needs to be completed.”

Van Veen thinks that electronic data regarding the origin of products are going to be even more important after Brexit. “As a breeder, make sure your data are correct.”

Quality standard

According to Marc Calon, chairman of LTO Nederland, Brexit is already causing a loss of turnover, because of the unfavourable exchange rate of the British pound. “Import duties and logistical and phytosanitary barriers will be added to that. But another big danger in my opinion, is the risk that the UK is going to have lower quality standards than the EU, for food crops and for plants.”

Before the British joined the internal EU market, they always pursued a cheap food policy according to Calon. Food had to be as cheap as possible. “Chances of that idea returning in the UK after Brexit, are very big. While in the Netherlands, we aren’t just focused on volume, but much more on quality. We’re just that little bit smarter and faster, and our standards are higher. I really fear for standards to go down in the UK, for food products, as well as for plants.”

Major concerns

Dutch entrepreneurs also have major concerns about preparations on the British side, what are they doing to hinder the trade as little as possible? “We can prepare ourselves very well.  We can arrange pre-clearance here, build large halls and appoint additional inspectors. But if they’re failing to get things in place on the British side, where does that leave us?” wondered Calon.

That’s why Anthos, organisation for wholesale companies specialising in flower bulbs and nursery products, called upon Carola Schouten, Dutch Minister of Agriculture, not to focus on the 143 extra NVWA inspectors alone, but to also attract people who can carry out substantive conversations with the UK on behalf of the entire floricultural and horticultural sector. “We’re really afraid that we won’t have the necessary capacity for substantive discussions with the UK”, said chairman Henk Westerhof.

Quincy von Bannisseht
Quincy von Bannisseht is redacteur van het Vakblad voor de Bloemisterij. Voor onderwerpen op het gebied van onder meer handelspolitiek, economie, agribusiness, logistiek en marktontwikkelingen draait hij zijn hand niet om.

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