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LONDON When Rishi Sunak signed his new Brexit deal in February, he boasted that it would deliver smooth flowing trade within the whole United Kingdom.

But just two months after the Windsor Framework came into effect, it's having huge unintended consequences for a key export sector, with hundreds of millions of pounds in trade now at risk.

Since October this year, all meat and some dairy products moving from Great Britain to be sold in Northern Ireland a part of the U.K. have been required to carry not for EU labels. It's meant to ensure goods aren't moved onward into the Republic of Ireland, an EU member country.

But the British government is going further.

From October 2024, all meat and dairy products sold right across the U.K. will also have to include the labels even if there is no intention to ever send the products to Northern Ireland.

The requirement will be applied to more U.K. food products from July 2025. And it applies whether the food is produced in the U.K. or imported.

Businesses say the plans for a U.K.-wide rollout go way beyond Brussels requirements as set out in the Windsor Framework and, crucially, could see EU exports plummet because of the costs and inefficiency of doing separate production runs for British and European markets.

Sean Ramsden, director of the Food and Drink Exporters Association and the CEO of food export business Ramsden International, described the new system as absolutely cataclysmic for food exporters.

Ramsden told POLITICO he fears that eventually all of the products he is supplied with by partner Co-op will be labeled not for EU, which means we cant export them to the EU."

While large manufacturers may find it easier to comply with the new rules, Ramsden says the changes could prove too costly for smaller operations.

A lot of manufacturers will probably just give up on the European market, he said. It seems an inconsequential thing to say put it onto the packaging, but in practice it means changing production runs. Manufacturers are saying this is crazy because they dont want to start doing additional production runs.

His concerns were echoed by Balwinder Dhoot, director of sustainability and growth at the Food and Drink Federation (FDF). He told British MPs recently that implementation costs of the labeling requirement would run into hundreds of millions of pounds a year across the industry.

It generates a risk for hundreds of millions, if not billions, of pounds worth of exports, he told MPs last month. That is an unnecessary domestic policy. You cannot have a trade policy that is trying to promote exports on one hand, and then undermine that with domestic policy on the other.

A spokesperson for the group, which represents food and drink manufacturers, said the labeling removes the flexibility that was agreed with the EU and will result in less choice for shoppers in both Northern Ireland and GB.

A more pragmatic approach would be to monitor supply before taking action, and work with the industry to find a practical solution.

Although the U.K.-wide labeling requirements do not come into force until October next year, some manufacturers appear to already be using the labeling system in preparation for the rollout.

As a result, Ramsden says his company is having to do manual checks on everything, take out the [labeled] products from the orders, return them to the supplier, credit them to the customer and take them off our list.

Another unintended consequence, Ramsden warns, is that non-EU consumers will be put off by the not for EU labels.

If we export to other markets, what are the consumers going to think when they see not for EU on the packaging? They are going to question whether its safe, he said.

For Ramsden, the labeling requirement is just the latest in a string of headaches resulting from the U.K. leaving the EU, which has already seen the companys sales with the bloc plummet from 25 million to 16 million as a result of Brexit.

This will finish it all because we are supplied by stock thats in circulation in the U.K. market.

A government spokesperson said: The Windsor Framework drastically reduces the paperwork and processes required compared to the old protocol. We continue to engage extensively with businesses to support them in adapting to these new arrangements.

The rest is here:

Rishi Sunak's Brexit deal is up and running. It's 'cataclysmic' for UK food exports - POLITICO Europe