 I warm welcome to the ninth meeting of the Constitution, Europe, Exile Affairs and Culture Committee in 2024. We have received apologies from Megan Gallacher MSP and Keith Brown MSP. Mr Brown is substituted by Kevin Stewart, as he can invite Mr Stewart to declare any relevant interests. I will take the next item. Our first agenda item is a decision in taking business in private. Our members are content to take item 3 in private. Our next agenda item is to continue to take evidence on the committee's inquiry on the review of the EU-UK Trade and Cooperation Agreement, and we are joined this morning by Tavish Scott, chief executive of Sammond Welcome, I'm sure you're familiar with this room, Mr Scott. Donna Fordyce, chief executive of Seafood Scotland. Scott Walker, executive manager, Scottish Meat Toll Sailors. Fiona Burnett, technical director of Scottish Quality Crops. I welcome to you all and thank you for the submission to the committee prior to today's evidence session. In the submission, Seafood Scotland highlights that the customs rules of origin and the sanitary site of sanitary requirements have added a considerable time and cost burden to Scottish traders. Scottish quality crop suggests that recognising equivalence in SPS standards across EU and GB borders would be welcome. Sam and Scotland seek to, as was spoke, a mutually convenient SPS and veterinary agreement. I'd like to understand the particular challenges just briefly and also what would you want to see from such an agreement and what would it look like from your point of view and perhaps I can begin with Mr Scott. Thank you very much for the invitation to offer some thoughts to your committee this morning. In short, the best way to describe this is the route that salmon takes from harvest on the west coast of Scotland or in the islands, all the way through the central belt and in particular the hubs, the logistics hubs, through to the channel tunnel and then to Belyne Sumeir, which is where most salmon and, indeed, as Donna will reflect, most seafood goes in terms of the route into the European Union as opposed to Heathrow for wider markets in North America and in Asia. That very tight logistics route was made more challenging by the departure from the European Union, both in terms of the time taken for journeys because of the extra paperwork that we as a third country now have to comply with, which obviously previously wasn't the case, and secondly in terms of the cost that added to the business journey. So it's probably those factors cost to business, the time taken on for the journey, which of course is really important in the context of a time-sensitive product, fish after all, we're selling fresh fish into Paris, Monte Carlo, Berlin, etc, etc, etc. And there the consumer demands that, or the retailer, the consumer, the wholesaler demands that fish to obviously be pristine. And the other aspect to that is that we're competing with our good friends and colleagues in Norway who will equally say that they can provide product into those market places. So all of this added to that market pressure that we face. And we've absolved those costs because that's what business has to do. We've continued to seek better trading arrangements, which is the second part of your question in relation to what comes in the future. But the fundamentals are bureaucracy cost time that we face as businesses and those costs, in our case the salmon industry, are around £3 million extra a year. Thank you very much. Can I go to Ms Burnett next? Obviously SPS measures have benefits as well as downsides and broadly for cereals and oilseeds, the combinable crops that the SQC scheme covers, the impacts are fairly minimal. We welcome the fact that the measures are now risk based so that grain other than for seed is at very low risk of inspections and measures. And that contrasts with something like potatoes, which are not in our scheme, but obviously are still unable to be traded with Europe. So broadly that kind of risk based approach is positive. In our evidence we highlighted though a couple of issues. So the idea of equivalence when it comes to renewable energy directive where we've had difficulty because UCAS, who is our national body, was not recognised by Europe, so it's these difficulties. It's a relatively small market relative to other grain and cereal markets but we still estimate it probably adds about £10 a tonne to grain so on, over 3 million tonnes, that's a significant lift to the market. We know that there's difficulties transporting samples so that we have less intelligence on new variants of diseases and pests so that's another hindrance. Going forward we worry about any kind of divergence so in our schemes about safety and credibility so anything around a divergence on chemicals, pesticides, the regulation that talks about protected zones and the diseases that are relevant so we just need to stay engaged. So the success of the equivalence for us would be that we remain engaged with the agencies in Europe that decide on these things. Yeah I'll just build on as well what Tavish said in the well capture in the shellfish. For a lot of our processors it's really reduced the time that they have so they actually buy the fish on the market that morning so the fish isn't getting to their premises so maybe eight nine o'clock. Normally the groupage vehicles would collect that around about two o'clock now that's had to be 12 o'clock so a lot tighter window plus being able to do all of the additional paperwork has really put a burden on a lot of the smaller processors and actually when Brexit the groupage collapsed so we use a groupage system so for companies prior to Brexit dealing with France was just like dealing with Glasgow so it was a very very simple process and now all of that was added in and the additional costs so companies maybe had 10 customers who were maybe buying five 10 kilos from them every day and that was being sold every day the cost prohibited that so many of the small businesses now stop exporting into Europe and have just really focused on the UK market which is a real shame so then we've you know it's it's just putting smaller businesses either out of business or or reducing their market share. Thank you Mr Walker. Thank you very much for the opportunity today I speak by the red meat industry and so I won't go over all the same ground that has been covered because the points raised by both Tavish and Donner are equally equivalent to the red meat industry. I'll just pick on a couple things before talking though by future arrangements and improvements that can be made. In terms of groupage that was a big impact for the smaller meat processors in Scotland who rely upon groupage and can't send across containers himself and there's only one haulier now that's involved in the groupage for red red meat and the route they take is Hull to Zee Brugge and as a result of that that means certain markets in Europe can't be accessed now so markets that used to be very profitable such as Monaco just can't be accessed in the times required so that's had a big impact upon them and resulted in the loss of markets but if I look then to the future as to what sort of improvements could be made to simplify the process and I think the key bits to focus on is bureaucracy and cost but even regardless of any future arrangements that could be put in place there's still going to be costs that can't be eliminated so import costs duty costs to go into to Europe so even throughout all this simplification process if it is at all possible there's still going to be a cost burden that's facing the industry and those costs represent money that could otherwise have been invested here domestically in Scotland to improve businesses improve efficiencies and grow firms but if I look into the future what would say first and foremost is electronic documentation the more we can actually move the documentation to electronic forms to simplify the process of getting it on to the various databases and remove errors that probably would be the single biggest win for for the industry to reduce the extra time and effort and people that are now employed in meat plants just to cope with the paperwork that goes forward and probably still remains the single biggest point of friction as you get to border control points in in Europe so that'd be the first one when we'll look then at SPS agreements going forward they could be actually anything potentially and for me I would sit a separate amount to two big issues one that's about public health and the second one about animal health and if we concentrate on the second one first about animal health in terms of how we operate just now in scotland is still very much aligned with how things operate in in Europe but we've got to verify all that each time and got to prove that that is is a case hence the very complicated export health certificates that have to accompany each load that goes goes to Europe and depending on the products that you're exporting because most containers have a number of mixed products there you don't have just one export health certificate you have multiple health health exports to certificates that go across which again comes back to the potential problems that can arise as each and every single one of them now if we had a common health arrangement with Europe that recognised that animal health arrangements in scotland in the UK were same as Europe you could look at a huge simplification of the export health certificates you could look at mutual recognition of standards here and across Europe which simplifies all that process and also ultimately can lead to less inspections as products move through border controls second but in terms of public health it is at the moment an easiest way to describe it is that each meat product that leaves this country has to be stamped and it's through that stamp is the way that we verify that our public health arrangements meet the public health health arrangements in Europe now again with that is a lot of cost there's a lot of veterinary times in terms of inspecting products and these paperwork that's associated with that so if we could get our public health arrangements with Europe with this recognition of our public in the process that we have in place are equivalent or the same as the process they have in place in Europe there's opportunity to simplify that documentation there's opportunity to simplify the inspections that take place which ultimately leads to a reduction in costs and eases the frictions of movements of products to to Europe so i'll stop at this stage okay that's great thanks i'm going to bring in mr shillie ms forbes thank you convener good morning you've all touched on the the complexities that you've had to face and the and these are mainly logistical or bureaucratic you've indicated this morning but the the complexities of trying to manage that have been you've already said this morning it's a burden in your businesses and how you manage that and it's about how you cope with managing that burden we've asked others in the past about how they've managed to keep track of the changes that are happening within the EU and what impact that's had within your own sector i think all of you will probably say that that has added cost that it may have added personnel into new people having to deal with the new rules and regulations that have had to come into place and that's been a financial cost to you and that in turn is then a knock-on effect within your own bottom line about what you're trying to achieve and that may have meant that you have lost commercial opportunities because of that so i think you've all explained that but it would be useful to get a flavour as to what burden you've actually seen within your own sector and that as I say is a financial burden but it's also a people burden about trying to manage that and how you've coped with having to take on the new regulations and how you've managed the number of staff or have you had to increase just to deal with that on a day-to-day basis to try and wade through the logistical and the bureaucratic issues that you have so it would be good to get a flavour from each of you over that donna thank you very much for your question for ourselves as an organisation we've actually had to be brought in three consultants and we were funded by scottish government through the food and drink team immediately to bring on brexit specialists so they were there as a support mechanism for the company so to try and help them navigate through things ensure they were the correct commodity codes to be the liaison with uk government with scottish government to highlight all the problems that were going on what could be done to do webinars etc and really trying to help support that so again and that's us just dropping that off now though we still continue to have we'll have monthly meetings still on on with industry and with uk government deffrous scottish government as well still on the continuing issues that we have but for for organisations you know it's not just the additional cost of people that they've had to do it's a lost opportunity as well you know it really is they've had to stop and strategically looking at their businesses and be very operational focused and that was even in the lead-up to brexit of really trying to ensure that they were ready for brexit and we had obviously covid as well but really focus on that and then having to the realisation that the systems didn't work on day one of brexit you know so it really has you know people have had to bring in new new finance people you know but they've also had to then reduce that in other areas because you know they just can't cover all of that cost burden because it's not just that people it's your additional cost to get the product to market as well thank you scott and then tamas thank you for this i think i'll split into the impact on large processors and small processors because there is a significant difference and it's also by that capacity to deal with this situation so in the first six months for everyone in the industry it was a huge learning curve you know there was there was no textbook no template that people could could follow and because they hadn't been used to dealing with this in terms of dealing dealing with Europe before so all the costs were exceptionally high in the first six six months and then thereafter they've reduced so i'm going to concentrate on what's in place now rather than what happened in in the first six six months so if you look at one of the large processors in scotland they operate not just in scotland but they operate elsewhere within the united united kingdom and what they have is a central team who basically are to keep abreast with what needs to be done and provide the training that's required in each individual meat plant under their group to comply with the rules necessary then within the individual meat plant within scotland they've got a team within that meat plant who are to deal with all the paperwork so from the export health certificates to the lasing without the haulage companies to transfer all those documentations backwards and forwards what they also need to employ is an agent based at the bcps across across in europe because what they have found is that while it's a common set of rules the approaches taken of the bcps can be quite different in terms of the vet inspections that are done what individual vets are looking for at each point there's a bit of discretion open to them as to what they concentrate on and they need somebody there to manage those situations as they arise and make sure that is then a swift throughput and addition of information or correction of information if it's if it's if it's required so what one of the large processes i've told me is that they send five containers each week across to europe and they reckon that the increasing cost to them in terms of just that staffing and processing the paperwork so not the actual physical haulage at all of the product across there is an extra £6,000 per week is what they incur so over the course of the year that's an extra £300,000 which is just dead cost that has been sucked out of of the business now if you've got a made business which is operating in a good year on a profit margin of one and a half percent you could see that that's a huge cost associated with it now if you move to a smaller made processor one many have just simply given up because to try and learn and comply with those those rules is virtually impossible but it has to be said that within scotland within the meat processing industry both large and meat process small meat process tended to try and help on another so while they are aggressively competing for business all the time they also actually work collectively together to try and access new markets because it's a benefit for everyone so for a smaller meat processor who's still exporting and still using groupage on a few few who are doing so what they say is that and that outset of brexit they had a member of staff who was spending about 20 hours a week doing the work they're now down to spending only eight hours a week doing this this activity so well and they reckon it costs them roughly about 600 pound to shift to two and a half pallets each week to to to Europe so again 600 pound may not seem much but that's not haulage cost but that's just extra fixed costs that are associated on it and that's only two and a half pallets of product that's going to Europe which again is on a very small tight profit profit margin damage yeah i'm supposed to be in consultants as donna was indicated and in flights and train journeys to London because we all spend a lot more time going to London now than we did before because of because of what's happened i agree with scott's point about you know that first six months the brutal reality for the salmon industries we just didn't harvest in that first period after we left the european union because no one knew what was going to happen to the market and business as you well know take business decisions based on uncertainty and therefore that was the in terms of fulfilling contracts that was a challenging time where we are now as scott and donna rightly reflect is we're used to the systems we have taken those costs we meet them ourselves the customer doesn't want those costs passed on so they are just part of business costs and i've indicated what they are for our sector the slight difference between us and smaller smaller operators in the seafood sector is by definition salmon is transported in in one lorry as a word it's one product in one lorry as opposed to the groupage arrangements that donna spoke to some moments ago and that makes it a little bit easier in terms of what happens when fish arise in boloinsumere boloinsumere is as a weather centre of the universe when it comes to france and comes to the logistics operation and if i was recommending overseas trip for this committee boloinsumere is a great place to learn about how logistics work and indeed how seafood works also a fantastic restaurant down at the docks but that's for for a different discussion um the the point there as scott rightly says is that we as an industry have had to have more people in station to to monitor what's going on and in addition the new arrangements means that our fish is now sampled to a much greater extent because we are a third country there is greater sampling of our product which creates some challenges in terms of how that's carried out the consistency of that process what that then does to our fish to be blunt when it then goes to the customer so there's some additional challenges there and we speak to the french authorities regularly on that and indeed the european authorities on on that as well so that is the practical effect of the changes that have happened at border control points which in this case is boloinsumere for sunny for salmon and indeed for for more generally for for seafood so so in short additional cost and additional paperwork how would we get around that why we're spending time in london is with defra the UK department for for for this area of of responsibility trying to get in place this electronic european health certificate that's what we need we all need that and we've frankly been banging our head against a brick wall for four years now on that and success and look very fair engagement with ministers and officials but they haven't got it done we hear we've been told that uh salmon would be easier to trial because it's one product in one lorry therefore easier in terms of paperwork and so on so forth um but we still know further on and i and i frankly don't think we'll see any sign of a european health certificate in electronic form this side of a uk general election what happens thereafter who knows but that single measure as scott and donna have both reflected would make a considerable improvement to our systems and help us export okay thank you and funer i mean our perspective from scottish quality crops is kind of maybe unique so for all we assure 90 of scotland's a combinable crops we only employ one person and that's our managing director to raise a doogle so you know like the others consultants brought in to help with the red complexity but the strain on an individual as well as significant um that was a huge job and of course we worry that red two is just the start there's no red three so we have seriously considered whether the time and cost is worthwhile because we always have an eye on valued to the members our directors are made up of various you know monsters millers buyers nf us i'm employed by scotland rural college um so the the costs born by those organisations supporting so it's a major concern that okay thank you for being here this morning i guess a lot of our discussion so far has centred on the challenges that you're facing just now or have been facing and i'd quite like to move to the future and there's really two angles to my question one is the prospect of positive change and then the second is if there is none what might be the long-term impact on markets in terms of producers priorities and customers preferences so on the first part um i've asked a number of our stakeholders this question but do you think that the prospect of change is particularly high and does the evidence that you supply have any bearing in your view on what the politicians and the negotiators might do in terms of a review of the tca does it just boil down to pure politics or is there a root in there you know we've seen in the last few months where for example there have been changes around horizon but there's been a lot of things that haven't changed so that's really the substance of my first question um i might come back to the second question after you've answered because there's a lot in asking to at the same time so that first question what prospect for change is there and how do you enact change yes happy to have a go at that great question and i'll try and avoid getting into politics because that's not what i'm paid to do the the prospect of change in the context of a UK general election is from a business perspective is important and if nothing else a resetting of a relationship between the UK and the EU would be welcome if nothing else that would be a welcome and significant change for us and business sees that opportunity and would support that and is not slow at the moment to be offering the policy prescriptions and the ideas that would make trading with Europe as the coal market for something for salmon as you well know from your consistency fundamentally easier one practical example the Norwegians at the moment can use bulk bins recycle recycle bulk bins which are collapsible and and once clean can then be taken back to Norway and used again we'd love to be able to use those from Scotland there's environmental advantages there's packaging advantages there are efficiency advantages the european regulations are four years out of date in this world so if we see an improved trading arrangement even at top level never mind some of the details we've talked to today but even at top level between london brussels those kind of initiatives and those kind of improvements in terms of how we provide the product into France and into the european bloc could be enhanced because we'd have an ability to make that case at the moment that door's pretty well shut so i am i am very supportive of anything that would lead to that better trading arrangement and our businesses would welcome that and welcome a government that wants to take that forward and from there on we would see some potential to instigate some of the changes we've talked to this morning about about making the practicalities of trade easier thanks so i agree with what tatfish has said said there and i'll come back to politics in a minute but just look at the commercial situation just just now so up until this point in time it's basically been a one-way problem so we've had all the hassle and problems of getting into to europe and we've been speaking to our counterparts across across in europe about this but they've had no issues at all in terms of sending their products here here to the uk so from a commercial point of view there's not been much noise in europe because they've not noticed any difference and while they may sympathise with the situation that we've been in again from a commercial point of view why would they want to make anything simpler because they've had the benefit of it there's now a lot of discussions within the meat trade just about how complex it could be and it used term could because we've still got to see all different processes that would be put in place in time but how complex it could be in terms of getting products into into the UK so right from a commercial sense you will get commercial bodies lobbying their respective governments lobbying the european commission to say look we've got long-established trading arrangements here with the UK let's try and make these simpler for for everyone because customers still want the product we've got lots of added costs being put on here how can we simplify the process so I think politicians will come under a lot more pressure in due course to do something about it and hence then moving on to the politics and I think I just picking up on on tavish's point it's about resetting that relationship with with Europe and basically saying there's a win-win for everyone involved here if we can get to a common situation going going forward which comes back to my points about animal health and public health in terms of saying any agreement that can have with Europe would be bespoke it can be whatever both sides agree agree upon so we can have a look at different components of it and look at what components make sense what components can give the biggest you know degrees of freedom and flexibility within within the future oh thanks Ms Forbes and just to build on again what what tavish and scot are saying about the we really do need that better relationship with with the EU I think as an industry we felt like we had no negotiating power after Brexit felt like we gave away such a lot and in Europe didn't so that obviously that there just certain to feel the effects of things coming into play from the first of April and it'd be really interesting to see how that plays out because our fear up until you know we didn't know you know to the last minute you know could it be worse you know could we have tariffs you know again so again you know we need to be ensuring you know because that could be the next step on renegotiations that you know we then they start discussing tariffs and so we need a good relationship so so we're not in a worse position you know we're in a bad position now we're getting better with it but it can be worse you know we can be then be having tariffs as well so so that and you know we'll make the situation very bad for the industry I've just just come back on on one point it's that managing the relationship I think is hugely important and if we give give a bit of analogy when the commercial businesses started exporting to to Europe and all these different problems that arose out the bcp whichever agent you have in place is actually very critical to to that because they build up a relationship and understanding with the people that are working across there they build up a level of trust so they know that ex-business actually does things correctly you know the ex-business you can rely upon them that if there is an error they quickly correct correct that error and it's somebody they are physically managing that that process and it would turn that to then it's about the government as well that whatever agreement is hopefully reached in the future that improves that it's not just that day that that agreement is signed but it's that actively managing that relationship going forward so that as issues arise as problems arise there's a two-way open dialogue between both sides with the mindset that they actually want to resolve problems rather than mindset of actually wanting to you know make things sticky and make things problematic so relationships are hugely important in this area. I would like to take that point that sort of resetting the relationship and and managing it positively is would be a positive future again our perspectives may be slightly skewed by the fact that we're net importers which may have you know made it easier for stuff coming in again potatoes not in the sqc scheme but they contrast where we're still unable to export seed potatoes to Europe and that has just become stuck you know trade is only one way that plant health diseases pests move about so I think on a kind of detailed level the system where Sasa works closely with DEFRA the plant health officers cooperate at that detailed level there's good exchange of information and again that's really positive but it's just unblocking some of these sticky issues and again I come back to the worry that if we get divergence from from Europe in terms of you know safety on grain, micro toxins or chemicals that's a worry because we wish our scheme to be equivalent and recognised in Europe to reduce the burden on growers where the worst-case scenario is that they're having to operate to multiple assurance schemes appreciate that and it's perhaps a little bit more optimistic and hopeful than I was anticipating so that's good but on my second question then what does the market how do your markets change over the coming years so I mean the the the evidence from from salmon is just remarkable I'm going to quote from the briefing 2019 53 000 tons of the scottish salmon exported to the EU 23 volumes near 44 000 is that a trend and secondly obviously it's scottish salmon UK's biggest food export in 23 France and the US leading global demand this is essential to Scotland's economy I mean you're all essential to Scotland's economy but further to be such a substantial drop if that is not reversed and if there is not prospect of significant growth in food exports for example then Scotland becomes poorer that's pretty pretty devastating what do you see the future looking like in terms of your industries and how do we ensure that our nation isn't poorer for your industries being impacted can I first go at that thank you for that very good question I mean I am optimistic about the future Ms force be be no shadow of a doubt about that not least of which because the demand for salmon and indeed for seafood to worldwide and therefore from Scotland is phenomenal and we actually nearly can't keep up with it at times I mean a continuity of supply is quite a significant factor for us as a sector at the moment and while that's a real challenge with with certain markets it's in some ways a great challenge to have because we've got that ability to to scale up in a sustainable and appropriate way with all the regulation that we deal with as an industry and we should be and are regulated so that the backside of that is absolutely fine and fair my view of the way it's going to go for the next five 10 years is that as long as we as long as we can sustainably grow in Scotland that means some of the reforms that we've been working with your government with here in at home then the marketplace is very strong for our future but it is more it is wider than just the EU now so we we can rebuild that market share in Europe although we do that in a in a dose of heavy competition I think be fair to say with our friends to the east based mostly in Bergen but that's just the nature of business and the nature of markets but the other markets that we have worked really hard in salmon terms and but Don and I are both just back from Boston because that's the centerpiece of the North American seafood market and the and the export that takes place there is how is that going to grow and how significantly is that going to grow and the answer is it will and Scotland's salmon producing companies have great export opportunities in those emerging markets and and indeed in North America and mature market but also to the far east and and Donna can speak to this far better than I can but I just think that potential is very significant indeed so the the future over the next five 10 years is is absolutely Scotland can grow and then to your economic point if we grow we employ more people we create more taxation income for your government we create more local jobs in in constituencies the length and breadth of the country something I'm very proud of indeed and we also grow our supply chain which is highly significant now in terms of the money that goes back into the Scottish economy that fuels much needed economic growth so I applaud the Scottish government's export policy paper that that I know you had a very significant part over in the past that kind of overarching vision of where our sector can be along with colleagues right across this table I think it's where we need to drive forward on and we need to orbit by making sure all the things we do at a production level are right and we can fulfill that emerging and ever-growing market need thank you again Ms Forbes for your question on so we are the trade marketing body for Scottish seafood and we are funded by a Scottish government through the Marine Fund Scotland and we are there to ensure that we are getting a premium price for our seafood seafood is highly exportable you know around 80% of our seafood is exported and around 80% of that goes to Europe so it's our biggest market by far but we have to de-risk that reliance on that marketplace and how do we do that so we have been looking at other key markets as we have throughout the the years we have in market specialists as well which is an industry government partnership that we have and we have boots on the ground in key global markets as well but really looking at where are the opportunities for seafood so as Tavish says we're just back from the seafood expo in North America and really looking at that's our second biggest market for seafood how can we grow that market our third biggest market is China so how do we grow that so again it's being able to be out and be visible at the China Safeway Show but also as well opportunities such as Showcase in Scotland and bringing the Chinese buyers and other buyers to Scotland because we want to showcase Scotland to people of the price of the product but it is and it's the looking at the Japanese markets really being aware of where are going to be the next key markets and so we're currently scoping out South Korea the fantastic opportunity for salmon in South Korea but also we've now got landing targets for mackerels so there's going to be more mackerels increasing landings in Scotland so where do we find markets for that so again it's scoping out looking at new market opportunities as well which takes time it all takes time it's all additional costs at the moment ensuring the logistics are all there so it takes a bit of convincing with companies to then move from a secure marketplace even though it's costing them more to then take that so they need a bit of handholding through that and and being making sure it's the correct move for them but de-risking the European market I think is is key spreading that risk but also trying to get as much premium for your product as you can and not be treated as a commodity. The red meat industry isn't as export focused as salmon or seafood but three out of every four farms in Scotland are in livestock production and therefore anything that happens to the red meat industry processing sector ultimately are felt by the farms in Scotland and has an impact on in terms of the land landings in Scotland now for us if we split again into just a few different different sections is that we've already saw some of the smaller meat processors in one recently go out of business in the last month not a single factor could be put down to it but one of the factors would have been the loss of export markets that would have had a contributing factor to in terms of large meat processors it's all about carcass balance and all about different points of the year so you know you've got to achieve that carcass balance to make make money and therefore the European market and markets for the field are hugely important processors in terms of achieving that it's also worth noting that we're not volume producers here here in scotland so we're not looking for a big volume market in in europe we simply wouldn't have that production to fulfil it but what we do is we target premium markets in in europe so they're high value markets which return in theory a high value margin back to scotland and it's also a good promotion in terms of scott scotland abroad so whether that's scotch beef or scotch lab or scotch pork all these are highly valued across europe in in different different areas so again going back to something that that happened in before i think it was a crying shame where we are not able now to export to monaco for instance because the promotion of scotch beef in monaco is actually has a huge benefit in terms of how scotland is generally perceived worldwide um what what we say is that in terms of us going forward what's the impact it's different difficult to disentangle impact of exports about other factors so whether it's labour issues which are hugely important which also tie into to to brexit or whether it's about a limited supply of cattle numbers in scotland going going forward all these are factors that have have to be be played but as a commercial processor what you'd be looking for is as many market opportunities as possible because it's through those market opportunities that you hope to at the end of the day have enough money that in allows you to keep the plants operating in scotland helps you keep the jobs that you have in scotland which isn't just about the meat plant itself but it's about all the infrastructure that surrounds it and I say we are just say the middle part of that whole food supply chain that starts at the farm goes through the processor then ultimately ends with with the consumer i mean scotland produces some of the highest yielding and highest quality crops in the world but combinable crops clearly trade as a commodity so the prices are kind of heavily influenced globally but that said easy trade helps to you know stiffen prices and add premiums and where that's difficult you know prices soften so there's a kind of immediate effect there from harder easy ability to trade but clearly you know strongly linked to the food and drink sector so again their ability to trade easily and and as others have said that idea that we can add you know premiums to to what we're what we're trading you know clearly the ambition is to produce sustainably and demonstrate that and that feeds through to you know what food and drink can talk about so our ability to grow our ambition to grow is there but it has to be easy to to trade thank you thank you thank you thank you very much convener and good morning to you all i'm pleased to hear about some of the positivity that you see for the future if there is change but i want to concentrate on some of the things that has been said this morning and some of the things in your submission and miss Forbes already is referred to the salmon scotland submission and that loss of export value of 80 to 100 million pounds from 2019 is pretty immense in my book and that is there in black and white but what is maybe unquantifiable is some of the loss that there has been that has been mentioned by mr walker in miss for dice this morning around about the impacts on particularly smaller producer smaller companies because of the changes to the like of groupage and i would like to to maybe tease out a little bit more around about that because that has obviously led to some market shrinkage i would imagine probably hasn't done quite so well for scotland the brand which we all want to see being up there so i maybe if we could expand a little bit more on that groupage difficulties mr walker you mentioned the fact that the main way out of the uk and i was through hull to zebrauga and that has shrunk markets you mentioned monocle just not minutes ago could you give us an indication of where our product is not reaching anymore because of these changes yeah thank you yeah and just for clarification so the hull to zebrauga route is the groupage route so again across the channel it would be the main route for the large processors in in scotland but because of hull to zebrauga and the onward connections what i understand is the likes of portugal italy and monocle for instance are markets that's just no longer possible to deliver the product either in the time frame that would be required or at a cost that would be acceptable to to the marketplace and again what you're talking about here is premium product that would be going to you know some of the best hotels some of the best establishments in in the world which are as i say very good in terms of promoting scotland and for what is produced produced here here in scotland so what that has meant for individual processors is either downgrading the product in essence selling it to a lesser market perhaps here here in the united united kingdom or where they've still sell abroad is accepting a far smaller margin than they have had previously and as i say over the last month we've had one meet processing in scotland that has gone out of business so obviously salmon scotland have been able to quantify that devaluation and export you've mentioned there you know missing out on markets in portugal and italy in other places do you have a figure of the devaluation of that export market over the period it's not something that scots association and meat wholesalers collect themselves i would have to turn to quality meat scotland to try and get them to calculate a figure for for the committee okay miss for for dice obviously you know there are some processors still and i would need some smaller ones who maybe are not exporting anymore because of the groupage situation what what are they telling you so three of them have actually went out of business so so there's three went out of business we know from the larger businesses that they have picked up the orders that have been dropped off from the smaller companies you know so there doesn't seem to be a reduction in trade to europe and i'm seafood it's just it's moved to the larger organisations who can cope with that but it's it's reduced the the turnover of the of the smaller companies so so they're now just competing in that UK market we are working with some of them to get them into the middle east market because it's actually easier to get into Dubai than it is to get into to europe but for for the majority there there is a reduction in in their turnover and which is compounded as well with the labour issue so again they don't have the ability to process as much product as they can on that smaller labour issue because of the reliance on eastern european workforce so across scotland there was 52 percent eastern european workforce in the seafood sector but 78 percent in the northeast and in some factories up to 90 reliance on eastern european workforce so when you've hit covid and then you've hit brexit and we cannot be replacing these people or it's very expensive visa processes that a lot of them are going through these smaller companies can't do that either so so again the shrinkage in turnover is because loss on market but also the loss of people to be able to to process okay thank you mr scott do you have anything to add you've got pretty substantial figures here that you've quantified no thank you mr shard we just simply sought to give you some indication of what and it is an estimate in fairness because market trends would change over over year periods as well the only other thing i was going to add to don and scott's point which i hope would be helpful is one of the initiatives we were discussing before we came in to see you this morning is edinburgh airports plans for a freight hub an air freight hub and i appreciate wider concerns about transport by air but that's the reality of business and we all very much welcome the initiatives that have been shown by the airport sector in scotland to develop direct links to the kind of markets that don has just been describing that would be advantageous for scottish business and advantageous for our future so i would suggest that the full site of the edinburgh airport team certainly in bringing forward some some business ready solution there for us will be would be quite significant in the longer term as well and maybe something also of use to smaller businesses in the context of the groupage that you are asking about an air hub maybe promoting sustainable aviation fuel would be the the way forward miss bernard i recognize that things are a little bit different for you in these regards but scottish seed potatoes were quite a thing the impact and that inability to export must be huge on companies can you give us an indication of what they have had to bear because of these changes yeah i mean as i mentioned earlier the issues around seed potato trade with europe are unresolved so it's welcome that trade through the winsor agreement with ireland has resumed but yes that's ambition to trade more globally again potatoes don't sit in our scheme so i don't have numbers you know in my head i think a lot of that trade now you know europe and egypt for example so out with europe has become a major market but spain italy used to be major markets for seed potatoes so the need to resolve that is is obvious that's gone for the moment that's gone for the moment um which we need to get back and there seems to be no prospect of that resolving quickly at the moment and mr walker yeah perhaps if i could talk about potatoes which may be strange as i'm here today for the scottish association meatball sellers but i'm also part time chief executive with gb potatoes so i'm involved in in the potato trade so in terms of seed potatoes um as has already been said that market to europe was closed overnight you know in scotland we're particularly high grade seed is what's considered and therefore vital to the european market which is now suffering from a lot of various diseases within within europe what you saw happen in the seed potato trade is that the variety has changed so what seed potato producers have done is the growth of varieties that are suitable for the markets that they wish to sell sell to so what most have done is that they've shifted to varieties now for the egyptian market now the problem with egypt is that while it's been very i'll say good for the last couple years what we now are is very heavily reliant upon the egyptian market for exports that dominates are where our seed seed potatoes go go to and over the course of time the egyptian market i'll describe as best as being volatile so at some point of time we would expect we'll run into problems in terms of supplying the egyptian market so that's why looking at alternative markets are hugely important so there's initiatives in place to bring overseas representatives from other markets to scotland to walk them through what sasa do here how growers produce produce here and there's still a lot of work going on in place in terms of opening up the european potato market now on that it has been very positive in terms of potato growers in europe because they're actually lobbying very hard the european commission to get access to scottish seed because there's a huge shortage in terms of scottish seed in terms of seed potatoes at this moment so while i don't see anything happening imminently there i do believe that there is genuine focus of trying to reopen that that market and it would be you know genuine favour on the ground in europe to get scottish seed back into into europe thank you jack of all trades and master of many it seems mr walker i know that you don't really want to talk about politics to any huge degree mr scott has made that plane but we are on the run up to a general election and obviously you have pointed out today and your submissions and have been talking about this for some time around about european health certificate around about getting the public health certificate right getting those public health arrangements right and cutting down on bureaucracy so what would your plea be to those candidates that are standing in the forthcoming general election and i know that you all see this as being very high in your agenda but what will what should these politicians future politicians be thinking of in terms of their own policy priorities and how high up the agenda should this be for them mr scott it's a very fair question i really do and in no way are we avoiding it i think in some ways we've already answered it because we've already all talked to the importance of a better trading relationship between the country between with the EU and that is the fundamentals to it you can get into the detail and you've you've illustrated your knowledge of that by the subjects you've mentioned today but that is the fundamental we need a reset as donna i think you've done use the phrase reset we all need a reset of that trading relationship so we'd all be looking for aspiring politicians and aspiring governments in in london to want to be in that place and i'm pleased to say that we see some signs of that so that's encouraging for us as business people trying to grow the Scottish economy and grow our businesses within that Scottish economy and and that's what we i think that's the simplest way to answer your very fair question mr Dice i agree wholeheartedly with tavish and you know whenever we get an opportunity we just remind people we don't lobby but we remind people you know how important it is to the sector so just trying to keep it at the forefront of everybody's minds as well of how difficult this is you know and you know how little things could probably make things a lot easier for us um yeah but it just feels like for some things it can just keeps getting kicked down the road especially with the digitised system so yeah there's things solutions there thank you miss bernett i'd be just concur with what others have said i i i would say if you had to commit you know if this was down to business you know business in europe and business here in the uk i'm sure this could all be simplified in a very very short period of time so i would be asking all politicians to to leave the baggage of the past behind it and look at you know what's in the benefit of the people of scotland the people of united kingdom where are we going to create jobs where are we going to create wealth where are we going to retain the jobs and retain the wealth that we currently have here and from a pure commercial point of view we need to get an improvement on the deal that we currently have with the european union thank you very much thank you thanks convener good morning to the panel i mean we've discussed extensively the need for change the impact um and how difficult the the situation is and and how difficult negotiations can be um i guess for example that my question is we've heard support today and previously for a veterinary agreement to be sought as soon as possible um and as a matter of urgency which makes a lot of sense um but we've also heard from the scottish fisherman's federation who have said they couldn't support a veterinary agreement because the tca is so currently harmful to the uk's fishing rights um so i guess my question is how does the committee balance those different views and are these just unavoidable trade-offs so mr baby asks a very fair question convener and i read that scottish fisherman's federation submission last night as well um for this session this morning and you're right these are trade-offs i mean didn't we half go through a trade-off some years ago on on all these issues i suspect and others would know better than me but i know from home in shetland that there are probably some fishermen today who take our or fishers today who take a different view of the european union than they might have done in the past without getting into the delicate area of fishing politics um so because the skippers i speak to just in day-to-day life never mind anything i do in the salmon sector um with our business people and the bottom line is donna has spoken to is is where is their market how are they how are they able to to run successful businesses and that's where we all are so i think there's actually uh i hope not to be accused of being naive about this but i think there's now a much more business focus um about what those negotiations need to look like from our perspective in terms of the salmon sector or others and while the Scottish Fisherman's Federation of every right to point out that linkage that happened all those years ago the tca renegotiation in two years time is an opportunity we think from a business point of view to make sure uh that the starting point is how do we improve trade and the fishing industry i think would be fair to say donna we speak to this as well um the fishing industry the fish catching sector know that too because they know what their market future looks like as well so um as long as it's kind of scott's point as long as we're allowed to put you know what is in the interest of of growing the economy which i think most politicians of all political parties are pretty signed up to do which we very strongly welcome then mr baby my view is that that yes there'll be tricky trade-offs but actually as long as we look at what grows the economy at a time when the uk has been in recession i'd have thought saying our heads will bear fruit in terms of coming up with a solution which is accepting those trade-offs but only producing a trade agreement which is better news for the British economy i don't know if donna's got that probably for for myself in my position i mean the majority my board are our fishermen are the fishing organizations and the producer organizations as well so i suppose it's trying to get the best of both worlds um and as much as we can you know how do we do these trade-offs but making sure everyone's as happy as they can be with with what we can what we can get and it's not a a major trade-off one for the other that hopefully you know it's it's important for for the economy you know because if we don't have enough fish if we don't have enough product then you know it's going to have a detrimental impact on on business so we need to ensure that we're getting our fair share of the waters to allow us to catch more to grow the economy as well um so so yeah it's that balancing act and and hopefully uh if we have a lot better relationship you know that we could come out with a better deal for for all thank you i don't know if scotter has anything on that i recognize the issues that i've been highlighted but i don't think it would be appropriate for for me to comment on the fishing industry first thanks given us thanks um what did i ask you about checks coming in the other way from EU to UK and whether you know that might change the dynamic a little bit here scott do you want to comment on that i think it will i think it it's got to you know and already the word that we are hearing from meat processors in in europe is it's changing their attitude to things and i think from just a simple perspective you could see why you know post brexit uh from a european exporter important to to the UK the note is no difference at all so brexit was all you know much to do about nothing you know really and all we've saw time and time again and we've comment on that every time that the checks and inspections were going to be put in place we saw that as going to be an opportunity to bring both parties to the table to to negotiate so we are now this year getting in place those checks and inspections being put in place are they going to be the same as we face in in europe i don't think they are but we'll have to wait and see once they're they're all all rolled out but what they are going to do is for the first time cause friction for european exporters wanting to get product in into europe and hence i think it comes back down to those commercial businesses will now be speaking to their respective governments will be speaking to the european commission and saying we need to look at simplifying the process we need to look at how we can make this trade just simpler and remove some of the cost and the admin and the time that's currently associated with it so i i thank it that these barriers in the uk side is are eventually going to be put in place if you're only saying that your sectors are now importer so specifically how do you see things panning out once his checks are brought in i think because grain is is deemed low risk in the risk model that it's a fairly pragmatic system at the minute that grain coming in i think the fees about 30 pounds a ton that operates relatively smoothly i know that our plant health inspectors are otherwise pressured at major markets so the kind of resource that they need to inspect other higher risk crops including potatoes you know that that's a kind of separate issue but as regards the combinable crops in green i think you know the the trade that comes in is relatively smooth and i'm presuming with salmon and shellfish that's less of an issue about your colleagues that operate the content importing to the uk but i suppose it does raise a question about how your sectors are working with your european compatriots and and in the sort of political context that we have to affect EU regulations and change so tavish i'm aware that the vast majority of salmon farms in scotland are owned by norwegian companies now does that give you potentially an advantage with norway being in the ea to then influence european union through that route is that as a kind of multinational industry does that give you an advantage and have always beyond london not really to be honest because they're separate business entities they report the report uh the norwegian two of our companies are norwegian owned out to the six um so one the other one's ferwys and one's canadian so there's uh but the point that you might make on norway is uh is important but no it doesn't we don't necessarily gain any leverage of that believe me the norwegian sector um supplies into the european market with great gusto um and in full competition with with scotland and that's uh and that's uh appropriate in market circumstances just one just one point on the import uh that you asked scott scott about uh we are already seeing some impact of that because we we use border control points both in the ffalkirk council area and in the highland council area and that has created an additional burden on if i may say so hardworking and um local government um environmental officers and other staff in those local authority areas so there is an impact on local government at a time when i appreciate it's really things are extremely tight um so we are already seeing a bit of that but i i think scott makes a very fair point there'll be there'll be a european dynamic to this quite quickly and we do work with our opposite numbers there's a european trade association in terms of farmed fish so you can imagine sea bass and a mediterranean and so on so forth we work with colleagues from spain and and Greece and others um on all these issues as much to understand the intelligence of work or the direction of travel of european policy in the way in which we used to when we were members of the the union show you'd be involved in rule rule making not just rule taking donut you have anything to add on that in terms of how as a sector you're kind of operating i think yeah yeah i think there's been a a huge um you know the industry movement continually all i hear is it's an unfair on level playing field you know so um we've heard that continually so they're welcoming these these checks coming in and more so is to give us leverage you know how can that give us leverage to come around the table again and let's talk we know there is a lot of talk going on and i know the scottish government had been out to france and meeting with balon smear and trying to make things easier at the border control points and trying to understand if there's any other issues that we could be doing back here so there is a lot of talks going on and making sure how smoothly things because i mean as scott says about it is customers you know ever customers as well want our product they want our premium scottish seafood they want it to be as simple as possible you know it's just making sure that the right people are around the table making the decisions on on how we could have frictionless trade okay thank you thank you um i wonder if i could ask um a couple of final questions guess everything today's reminded us that brexit wasn't an event it's a process and we're going through that process for some time um we're not just facing UK elections there's also European elections coming up which you know will delay any kind of movement although the commission will be up running fairly soon after that um but one of the things um that you've talked about is the importance of those relationships and building the relationships but um what tends to happen with countries is officials do a sort of three year rotation and then they move back and so so there's we're now moving into a period where where there are a lot of officials in brussel who don't remember the UK being part of that process and are dealing with it so do you think the challenge is um to keep and maintain those relationships are going to be harder going forward um and how much more effort are you having to put into um you know building the key relationships in the in the organizations that you're working with there um and as well um i'll come back to another question about divergence but i'll just ask that one firstly i mean i think you make a very good point about that relationship that we all used to traditionally have with brussels i mean i can't have been only in my former life of being one of if i may say so in this room um going out to brussels two three times a year just to make sure um you were making a constituency case or whatever and and that doesn't happen anymore um what are we doing now um we don't do anything like as much as we used to um we do much more direct country to country so donna's point about beloinsumere that is the centre of the universe when it comes to fish imports into the european union so we have closer contacts with paris and with french authorities than we do in that sense with brussels authorities what what i think we would certainly welcome as a as a sector is what used to be scotland house and used to be up crepe on this that they've all been renamed and are all something new now and forgive me for not knowing all the current so those were always really important touch points for business as well of course for politicians and governments and that kind of thing and once you get to the other side of the uk election or whatever that throws up i think for business we'd be really supportive of scottish government and and scottish government and others and parliament playing that role which facilitated a resetting of that relationship sorry to be boring and continue that theme but i think that resetting relationship would would be important for us in terms of of even some of the practical issues i was boring you all with bulk bins which is just a practical packaging and handling system we could do with finding the right european commission officials to have that discussion with because it takes the european union a long time to change regulations but we could do with starting to make that case so a reset of that would all be enormously helpful in your role as parliamentarians and encouraging that would be would be hugely advantageous anyone i just want to echo what tavish has said really you know i think you know that that relationship is so important and we don't really have that now um so to rebuild that would be fantastic so i got a couple more questions donnie you talked specifically mainly about the sorry scott did you want to come in on that just just very quickly so in association we don't have strong links or regular visits in terms in terms of europe albeit some of our member organizations in terms of the businesses you know are cross border so they have those discussions but again in the formal life when i was within NFE scotland i am just seeing how brussels operates it is all about relationships and i think it is in essence i'm going to turn it it's an opportunity as people move new ones come in who again don't have that baggage of of the past and what we do have an opportunity and tavish touched on it is that permanent civil service that are based still across in in brussel so scotland house scott rep across there and i think it is about them being seen being talking to people making those outward opportunities as much as possible and showing where there's just wins wins for everyone involved in it you know europe is really built around relationships you know brussels is built around relationship so the more time that individual spend there and build up those relationships to work to a sensible outcome that'll pay dividend for scotland as a nation and just to i mean the churn is a good point that it's a concern that's a change over plant health from my perspective often comes secondary animal health issues so i you know i welcome its inclusion today and from an sqc perspective is a very small organization the proportional time spent building up new relationships again the renewable energy directive because it cuts across many issues and departments it's really complex to form that network of opinions and when somebody moves on the whole thing unravels so that remains an ongoing worry for us okay and it's a the other areas is about regulation and change in brussels and divergence as you mentioned earlier on if you want to we were hearing from the producers last week about the amount of time that they're having to spend in and having consultants you know trying to keep on top of the regulations but we also heard of a producer who had shipped got on to the continent and the regulations changed mid shipment and they had a huge loss with which the business couldn't sustain so again that was another producer that decided not to it was too risky for them then to continue trying to export is there more that that you you know we Welsh and Scottish governments of the keeping pace commitment at the moment and Northern Ireland of course is in the position of harring to to keep up with those regulations is it enough that information being given by both UK government Scottish government support producers who are trying to export in that context and just get yourself done it is that one of the major barriers or what are the other barriers that preventing the smaller producers coming on board and keep it back in to to to attempting to do this as I say time moves on and we learned some lessons in it so I mean we go to I think that that you're right picking up on that point of you know the smaller producers and getting them back into Europe I think it'll be a real struggle to get them back into Europe just because it's still cost prohibitive you know and unless the customer is willing to pay that that extra cost but they've got other larger organisations who can still supply that so again that opportunity is lost but that's not to say that we couldn't be building on additional markets and again that's in Europe though you know the main focus is France you know we've gotten a lot of inquiries from Germany for example in Italy so different markets as well in that European Union are really showing interest in the Scottish seafood so looking at new markets but I think for information we're still having to set up our own forums we're still having to push we now we still have we had a task force from the UK government which has turned into the Scottish seafood industry advisory group which is chaired by co-chaired by John Lamont and with the cabinet secretary Marie Gougeon and it gives us a forum to be talking about things it's you know it's slow it's very slow and being able to progress because some of these are real challenges you know especially around the immigration around the digitisation of the health certificate we get information coming from from DEFRA and let's say we have our own forums where we invite Scottish government DEFRA UK officials on to actually speak to the industry on a monthly basis so again it's still a lot of time and effort being put in by everybody just to keep up to date and just to make sure and we still have the consultants there that we would pay on required if we need to look into to issues because there's still issues that come up yeah I mean the two issues we probably worry most about when it comes to divergence are you know pesticides which quite rightly come under proper scrutiny and also where Europe may go with gene editing so they're probably two pieces the food safety issues around micotoxins again kind of standard levels that are safe and you know we have many worries at the moment but maybe you know the examples around pesticides are regulated by the you know our chemical regulations directorate but that's now a duplication of what used to go through with equivalents in Europe the system is slow so things are approved in Europe before they're approved here so that feeling that we work at a disadvantage because we don't get new innovations as quickly as a concern that's exhausting my questions i'm looking to committee members to see if there's any further questions i don't think so and can i thank you all again it's been an extremely helpful extremely informative session for our committee inquiry and we have enjoyed these experiences as a we're not a subject committee so it's quite unusual for us to actually be getting to this sort of front line issues around this it's been more about the the constitutional aspects so we really have enjoyed these sessions so thank you very much and i now close the session of the committee and we're going to private session for a final agenda item