Seafood Disruption Scheme draws fire

The UK government’s compensation for seafood businesses affected by the twin challenges of Brexit and the Covid-19 pandemic opened for applications this week, amid criticisms that it excludes many of those worst affected.
The UK-wide Seafood Disruption Support Scheme will provide up to £23m in financial assistance to businesses that suffered a financial loss because of delays related to the export of fresh or live fish and shellfish to the EU during January 2021. The fund will be paid retrospectively to cover losses incurred between 1-31 January 2021.
The UK government says the scheme has been provided: “…in recognition of the unique circumstances currently affecting the seafood exporting sector at a time when the industry is facing lower market prices and demand due to the pandemic.”
The scheme appears to specifically exclude help for exporters who have been barred from exporting live bivalve molluscs – such as mussels or oysters – to the EU because they come from waters deemed to be of insufficient quality, although advice from the UK government had initially been that this regulation would be lifted in April. The government guidance says: “Shipments affected by export rules that prevent the movement of goods to the EU will be outside the scope of the scheme.”
Qualifying businesses for the Seafood Disruption Support Scheme must be registered at Companies House or have evidence that they are a sole trader, partnership or other legal entity, and must meet the following conditions: having fewer than 250 employees, an annual turnover of under £36m, and less than £18m on their balance sheet. Claims are limited to £100,000 for each business.
Applicants must be able to evidence the expected value of the consignment. Shipments affected by export rules that prevent the movement of goods to the EU will be outside the scope of the scheme. The call for applications closes on 28 February 2021 and, if successful, payments are expected to be issued during March.
Businesses applying for compensation must show either a customs declaration, or if they do not have that, a combination of eight or more pieces of documentation to show, for example, that there is a contract with the would-be buyer, a sales note, a purchase invoice and a catch certificate.
Donna Fordyce, Chief Executive of Seafood Scotland commented: “Since 1 January, seafood exports have slowed to a trickle as companies struggle to navigate systems that are not fit for purpose, being tested in real time, and are creating an intractable barrier to trade. Some companies have even given up trying and have put their businesses on ice for the time being, at great financial suffering to their owners, staff, families, and communities.
“We hoped the £23m would go some way to alleviating the pressure, while the existing problems could be resolved. However, the initial industry feedback today is one of disappointment, with many companies instantly realising they will be ineligible for support. This includes companies that have simply had to stop trying because their product has not been getting through. Or, seafood businesses whose long-standing orders from customers in the EU have dried up because of the export crisis. Companies cannot produce health certificates and other documentation for orders never made because of a lack of customer confidence that product would reach the EU on time, and in peak condition.
“It’s probable that these companies will never be fully compensated for what they have lost and are still losing, but the damage could still be limited if the systems were workable and export gets back on track quickly.”

Fisheries Secretary Fergus Ewing

Fergus Ewing, Fisheries Secretary in the Scottish government, said: “As feared and predicted, the new trading relationship with the EU is having a catastrophic impact on Scotland’s food and drink export industry. This UK Government approach appears to be based on its insistence that the disruption is merely teething problems, demonstrated by the scheme only covering January when the reality is that access to markets in the EU will be permanently more difficult and more costly.”
He gave the example of crab claws, which are explicitly excluded from the scheme although producers lost contracts throughout January, having been – wrongly – told they could not be exported.
Ewing added: “The initial industry feedback… is one of disappointment, with many companies instantly realising they will be ineligible for support. This includes companies that have simply had to stop trying because their product has not been getting through. Or, seafood businesses whose long-standing orders from customers in the EU have dried up because of the export crisis. Companies cannot produce health certificates and other documentation for orders never made because of a lack of customer confidence that product would reach the EU on time, and in peak condition.
“It’s probable that these companies will never be fully compensated for what they have lost and are still losing, but the damage could still be limited if the systems were workable and export gets back on track quickly.”
The UK government’s Minister for Scotland, David Duguid, said: “I have been engaging with the industry for many months and continue to work with all sections of the seafood sector in Scotland as we move to maximise future opportunities and adapt to new rules.”
The Scottish Seafood Exports Task Force, a UK government-led body which includes Scottish government and industry representation, is due to meet for the first time this week to work on alleviating export problems for the sector.