Ornamentals grower: no-deal Brexit case study

Martin Emmett, a director of The Farplants Group, a cooperative of five ornamental businesses with a turn-over of around £20m, explains the measures they are taking to prepare for potential changes to the supply chain with a ‘no-deal’ Brexit.

How reliant is your business on trade with the EU?

“Our business mainly supplies outdoor plants to UK garden centres. Although we do some of our own propagation; the majority of our young plant supply currently comes from other EU countries, so our immediate concern is the security of the supply chain.

We simply can’t get our stock grown from bulbs from the UK at the moment. Dutch growers currently dominate world-wide market for most bulb crops, UK suppliers (with only the UK market) don’t have the scale to compete.”

What impact would obligatory checks and inspections at the border have on your business if there is no free-trade agreement?

 “Any delays and implementation of new procedures required to meet new biosecurity and phytosanitary regulations is likely to lead to delays and also increased costs, which will ultimately be passed on to UK customers.

The industry in the EU will need to be taking steps now to make provisions for these changes. We are in talks with all our suppliers to make provisions and seeking assurances of supply regardless of the outcome of the negotiations. However, at the point where we know we’re leaving, we’re expecting disruption to supply in that immediate period, so we’re avoiding scheduling any deliveries at the end of March.

Any delay in imports is going to be bad news – plants simply can’t be stuck on a lorry for any longer than they need to be.”

What difference will a separate registration for UK plant varieties have on the industry?

“One element of our business involves developing new lines and commercialising the breeding rights for those varieties through exports.

We’re anticipating there will be increased costs if we need to register plants in two domains – UK and Europe, due to the increased staff and time needed to police and monitor both registers.

While there is a potential that an increased administration process and related costs for European breeders might stop some lines being sold in the UK, enabling UK breeders to displace this aspect of the market, we don’t believe it will create a significant new market opportunity.”

Do you believe Brexit will bring new market opportunities for ornamental growers?

“Optimistically, we can see an opportunity to potentially displace EU imports of plant materials but it will take at least five years for the UK industry to develop the capacity to do so.

Gardening is also about choice and variety for the consumer. There are imported products we’ll never be able to replicate, for example we’ll never grow olive trees in this country in the same way they can in Mediterranean countries. It is therefore more likely that barriers to imported materials from the EU will just lead to a reduced market size and choice. Limiting choice for consumers in this market could further compound the problem, turning public consciousness away from the garden retail market.”

Are there any other risk areas you are considering with a no-deal Brexit outcome?

“Our number one issue is labour. We have a workforce around 250 permanent staff and an additional 250 seasonal staff. Access to labour is seen as a major limiting factor on business growth.

There is a reduction in the amount of available labour in any case at present. In the longer term, there won’t be enough labour to supply all of manufacturing generally. Where we are based in the south coast, we are competing with the leisure, tourism and social care industries, in an area where there is effectively no unemployment.

As a result, we’re looking hard at staff retention and we’re taking various measures to maintain current staff.

It’s a reasonable argument that relatively cheap labour has stifled innovation and in a labour intensive industry, one way or another fresh produce will be more expensive, whether through the investment needed for robotics replacing human labour or from sourcing more costly labour.”

Are there any other changes you are making to your business to prepare for a no-deal brexit?

Ultimately we could make any number of preparations for Brexit, not knowing if they’re going to be worthwhile. We can only respond to what we know is certain, and there’s not much of that at the moment.

Martin Emmett is the chair of the Hardy Nursery Stock panel at AHDB and a member of the sector board.

Useful links:

Currently the trade and marketing of horticulture plant materials to and from the European Union is possible without friction due to the common catalogue of plant varieties.

The Animal and Plant Health Agency has confirmed that the current common catalogue varieties will be recognised by the UK for the next two years. However after that time, if breeders and agents haven’t requested varieties to migrate on to the UK registration, they will no longer be legal to market in the UK. 

As a third country under WTO trading rules, the UK would be also liable to meet EU sanitary and phytosanitary requirements in exporting plants and plant products to the EU.

For growers trading plant materials with the EU, the risk of new border inspections and certification on seeds, plants or produce could mean delayed deliveries, increased prices and contracts put at risk.

Plant Health Inspection facilities at first place of arrival for plant and plant products need to be approved and meet certain requirements.