UK food and drink manufacturers could lose millions of pounds as exports to India languish at Mumbai docks after authorities blocked shipments following sudden regulatory changes.
The shift relates to alterations to labelling laws and affects all countries exporting to India, not just the UK.
Waitrose’s international sales manager Chris Place said the lack of warning about the situation was a major concern, putting pressure on authorities.
“UKTI [UK Trade & Industry] is working hard to get to the bottom of this worrying issue,” said Place. He said the situation would have a “significant effect on all those exporting to that market in 2014”.
The problem could severely hit small food manufacturers, which could ill afford to scrap shipments and rework packaging and labelling, said Place. And it could deter many thinking of exporting food and drink to India. “These changes would require significant on-cost to products and will leave us and others asking questions about how we can trade with India.”
One industry source said there was a lack of clarity about the issue: “I don’t know why, whether it's permanent, and I don’t like the way it’s being done without any notice.”
Steve Barnes, FDF director of economic and commercial services, said: “At the moment, only 10% of food and drink SMEs [small to medium-sized enterprises] export and complications like the lack of clarity around labelling rules only serve as a further disincentive.”
All categories of packaged food and drink were affected by the situation in India, and in Waitrose’s case, this affected a substantial number of lines, which it supplies to Hypercity’s stores in a number of major cities across the country, claimed Place.
Food Manufacture understands the governments of the UK and other countries are pursuing all available diplomatic channels in efforts to resolve matters. However, a swift solution is not expected.
‘Maximise the opportunities’
“I hope government will continue its efforts to lift barriers to trade and promote information sharing so UK food and drink manufacturers – and in particular, SMEs – can maximise the opportunities available through exports,” said Barnes.
He said the FDF provided a free SME hotline, plus a guide, 10 Steps to Export Success, for firms looking to export.
Place raised the issue with environment secretary Owen Paterson at the Food & Drink Exporters Association’s annual network forum in London last month.
Speaking at the event, Paterson told Place that government and trade representatives were striving to address the issue. “As far as I am concerned, this is completely unacceptable,” he said.