Chart of the Month September

This month’s Chart of the Month shows the real (inflation-adjusted) monthly value of UK fish and shellfish exports, bound for EU destinations. It reflects the short-term and potential long-term impacts of Brexit on UK businesses. 

Over the last twenty years, fish exports to the EU have remained relatively stable. The spike in August 2003 is unexplained, although it may have been caused by an unexpected heatwave, which killed livestock and raised prices.

The fishing industry offers a reliable source of income. Fishers could rely on a smooth trading relationship with the EU, allowing the quick transportation of fresh produce. Demand for British fish is high. Many species common in UK waters, such as the lemon sole, are much more popular as seafood in Europe.

In January 2021, the UK left the EU single market and customs union. Fish exports to the EU fell sharply. Although firms had prepared for Brexit, few had foreseen the sheer volume of extra paperwork required.

Shipments to the EU now need to provide a validated catch certificate. This proves that the fish was caught legally. After uploading the certificate to an EU system, firms must send these details to the importer, who pass them to their relevant state authorities. Then, they require an export health certificate. A vet must then check and sign off all certificates before shipping. Managing this paperwork comes at a considerable cost to firms.

Once consignments reach the EU, they are processed in customs. Small mistakes or omissions in paperwork can lead to expensive hold-ups. Seafood is highly perishable, so even minor delays are highly costly.

As compensation, the UK government announced one-off funding for disrupted firms. A £23 million fund will cover £100,000 of losses (per business) caused by delays to EU seafood exports during January 2021.

New export rules have raised costs for the British fishing industry and lengthened delivery times. This has reduced the competitiveness of British exports. In the long-term, we may see firms pivot away from EU markets or adapt their logistical procedures. For instance, some British fishers have now chosen to land their catch directly into the EU.

The swift recovery in exports shows that most businesses have adapted to new regulations. A large majority of the fishing industry voted for Brexit. Cynics might say that they will be ardent to make it work.

Our Question of the Month:

“How will Brexit shape the fishing industry? What lasting effects might it have on the UK’s wider economic landscape?”

Data sources:

Consumer price inflation time series (All Items), (2021). Office for National Statistics. Retrieved 27-09-2020, from   https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/d7bt/mm23

Trade in Goods: Fish & shellfish, (2021). Office for National Statistics. Retrieved 28-09-2020, from  https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/jziy/mret#othertimeseries

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