‘Not for EU’ labelling: a case study of the Brexit mess

An important development in the Brexit process occurred at the beginning of this month, with the introduction of ‘Not for EU’ labels. As well as being important in its own right, it serves as a case study of the utter mess that Brexit has created, a mess which far from reducing ‘red tape’ has massively increased it, and a mess which is both the cause and consequence of multiple confusions. It speaks volumes for just what a mess Brexit has created that even this single issue needs a blog post of over 3000 words to disentangle what is going on, and, even then, only by leaving out a lot of the granular detail.

What is happening?

Since 1 October, all meat and some dairy products moving from Great Britain (GB) to Northern Ireland (NI) have been required to carry labels saying ‘Not for EU’. Goods bearing that label can legally be sold in NI but cannot legally be sold in the EU. This rule applies to such of those products as originated outside GB, including from the EU, if they have come to NI from GB, as well as to those actually produced in GB.

This is phase 1 of the implementation of regulations arising from the Windsor Framework. In phase 2, starting on 1 October 2024, this labelling requirement will also apply to all meat and all dairy products sold within both GB and NI. Finally, in phase 3, starting on 1 July 2025, it will additionally apply to several other products, including fruit, vegetables and fish, again in both GB and NI.

These are the rough outlines of the requirements but, as usual with Brexit, there is a lot of complexity beyond the outlines, in this case about exactly what products are affected and exactly what has to be labelled. The details of this are set out on the government’s website (some of which read like a script from Yes Minister: I particularly liked “if herbs are added to cheese or fruit to yoghurt, they are dairy products as the plant product adds flavour.”)

Although ‘Not for EU’ (NFEU) labels are not yet required for goods sold in GB, there are reports that they are already appearing on products on GB supermarket shelves, with one example, which received attention on social media last week, being an M&S ready meal in a store in Suffolk. Another example, this packet of Sainsbury’s French ham which was on sale in late September with an NFEU label in a store in England, is of note as it illustrates that the labels are applied even to produce originating in the EU.

Their appearance in GB suggests that some retailers have decided it is cheaper to have identical labelling across the UK and/or that it gives them greater flexibility in what stores they can sell the goods in and/or that it saves the costs of undertaking two rounds of package re-design as the phases unroll. For, all other issues aside, it is important to understand that implementing these regulations will cost millions of pounds for each supermarket chain, not to mention the costs for smaller businesses, all costs which are likely ultimately to be passed on to customers as higher prices.

At all events, as this labelling has begun to appear it has already attracted a lot of, mainly adverse, comment, and a certain amount of confusion – in particular, in the idea that the label denotes a ‘deficient’ produce which does not meet EU standards. The reality is, again, more complex. I tried to explain some of this in a short Twitter thread last week, but many of the responses showed that I had not done so sufficiently clearly and, in any case, Twitter isn’t a good medium for complexity. Actually, I also discussed it briefly when it first became clear, last May, what was in prospect, but that probably didn’t attract many people’s interest because at that point there were no actual labels in use. Now that there are, and with that use set to increase, it may become a major issue, especially as regards public opinion about Brexit.

So this post will explain in more detail why NFEU labelling is happening, what it means, what it does not mean, and how it relates to Brexit as a whole.

Why is this happening?

There are three parts to the explanation. The first part is to do with the general way that the EU single market works, and what leaving it means for the UK. Under EU (or any) single market rules, goods are produced to a common set of standards, and each member state adopts those standards and takes necessary steps to ensure that producers within that state adhere to them. On that basis, whether produced in Berlin, Barcelona or Bologna, they can be sold without further checks or proof of compliance – in exactly the same way as applies to goods sold within GB regardless of whether they are made in Bath, Bridgend or Blair Atholl.

If a country is outside the EU, its companies can still sell their goods within the EU so long as they conform to EU standards. However, for a country outside the EU, there is no presumption that they do so, and there could be no presumption that they do so, given that such a ‘third country’ has made no commitment to adopting a common set of standards or to taking the necessary steps to ensure that its producers conform to them. Instead, exporters have to provide the relevant certifications of conformity, which are subject to checks, including possible physical border inspections – hence the import controls that the EU now applies to goods coming from GB (although the UK has yet to introduce them on imports from the EU).

In this respect, it is irrelevant that UK standards and EU standards were identical at the time of Brexit, and still largely continue to be the same, because there is no commitment from the UK to maintain and ensure identical standards. That is, the UK may actively decide to diverge by changing standards, or may passively diverge by not adopting changes in EU standards. As regards agri-food products, which are what NFEU labelling is concerned with, the EU offered the UK a ‘dynamic alignment’ of Sanitary and Phytosanitary Standards (SPS) deal, whereby the UK would commit to neither actively nor passively diverging from EU standards. This was rejected by the UK, partly on the grounds that it would compromise ‘sovereignty’, and partly because it was argued it would reduce the scope for future trade deals (especially with the US), which might entail diverging with EU SPS (even though the EU had also offered the option of a temporary dynamic alignment agreement).

So now comes the second part of the explanation of NFEU labelling. Given these circumstances, amongst others, the hard Brexit of leaving the single market (and customs union) entailed a regulatory (and customs) border between the UK and the EU. For GB the location of that border was straightforward: the coast and airports. But for NI it implied a land border with Ireland which, despite some Brexiters’ continuing denial, was politically and arguably legally impossible. This, then, became perhaps the central complexity of the Brexit Withdrawal Agreement negotiations, leading ultimately to Boris Johnson’s Northern Ireland Protocol (NIP) which created an Irish Sea border between GB and NI which became operable in January 2021.

There followed two years of complex and bitter dispute, which I won’t summarise here (but see numerous previous posts), culminating in the agreement in February 2023 of the Windsor Framework (WF), a series of measures to make the Irish Sea border smoother and less intrusive. A key provision was the creation of ‘green lanes’ through which certain products could flow from GB to NI with minimal paperwork and no routine physical checks. Enabling this is what gives rise to the NFEU labelling, to help ensure that these products do not end up being sold in the EU single market, most obviously in or via Ireland. The result, according to Northern Ireland Secretary, and enthusiastic Brexiter, Chris Heaton-Harris will be “as close to a frictionless border as we can have”.

However, this doesn’t explain why NFEU labels will also end up being required in GB shops. So this brings us to the third part of the explanation. Whilst NFEU labels in NI are required by the WF, their use in GB is not a requirement of the WF but is purely the decision of the UK government. As I discussed when that decision was announced, it was taken for what Foreign Secretary James Cleverly called “practical and philosophical reasons”. The ‘philosophical’ reason was as a sop to Brexiters and NI unionists, aimed at reassuring them that NI was not being treated differently from the rest of the UK. The ‘practical’ reason was so that businesses do not have to use different labelling according to whether their products are sold in GB or NI (this also being the probable reason why some businesses are already using the label in both).

What does it mean?

Fundamentally, the label means one thing and one thing only: the product it is on cannot legally be sold in the EU. This leads some, perhaps mainly ‘remainer’, commentators to conclude that the product does not meet EU standards. That is a false conclusion. It doesn’t necessarily mean that it does not conform to EU standards and, at the moment, in most, and probably almost all, cases it does conform to EU standards.

However, it might not meet EU standards, and that will depend on whether all three of the following conditions are met:

·         if GB has actively diverged (e.g. the government’s decision to allow the use of the neonicotinoid pesticide thiamethoxam, which is banned in the EU) or passively diverged (e.g. by not following the EU in its post-Brexit ban on the use of Titanium Dioxide as a food additive) from those standards;

AND

·         if the product in question is one to which such divergences apply;

AND

·         if the manufacturer of the product has decided not to follow the prevailing EU standard.

So the fact that a product is marked NFEU doesn’t mean that it doesn’t meet EU standards, and it doesn’t mean that it does. It just means that there is no way of knowing for sure either way.

From the EU’s perspective, that is vital information, as it means that it is definitely not for legal sale in the EU single market as it cannot be guaranteed to meet EU standards. It does the job for which it is intended under the Windsor Framework, allowing it to use the ‘green lane’. But that job is an irrelevant one for UK consumers. This is also a point which seems to cause confusion amongst some, again perhaps mainly ‘remainer’, commentators on social media, who argue that, because the product is labelled NFEU and so cannot be guaranteed to meet EU standards, it should be avoided in favour of an alternative product which is not so-labelled.

However, this misses the crucial fact that products which are not currently labelled NFEU are just as unlikely (or likely) to meet EU standards. The absence of the NFEU mark does not mean ‘this product is for sale in the EU’. All that consumers can know is that a product legally for sale in the UK meets prevailing UK standards, whether or not it is marked NFEU. They do not know whether it meets EU standards, whether or not it is marked NFEU.

What is the GB situation?

This is especially confusing in GB at the moment given that some retailers are voluntarily beginning to use NFEU labels for some products before they are legally required to. This might lead people to conclude that Retailer A’s ready meal X, marked NFEU, is less likely to meet EU standards than Retailer A’s ready meal Y, which isn’t marked NFEU. Or that Retailer A’s Shepherd’s Pie ready meal, marked NFEU, is less likely to meet EU standards than Retailer B’s Shepherd’s Pie ready meal, which isn’t marked NFEU. But none of these conclusions has any basis: to repeat, neither the presence nor the absence of the label tells people whether or not the product conforms to EU standards.

Some of this confusion may disappear once the regulations are fully rolled out, as it may well be impossible to find directly comparable products which don’t carry the mark. However, there will still be scope for similar confusions because even then it will only apply to some foodstuffs. For example, whereas fresh fruit and vegetables will have to be marked NFEU when phase 3 comes in to force, comparable tinned fruit and vegetables will be exempt. Equally, comparability aside, the full roll-out may lead consumers to think that those types of products without NFEU labels are those that still conform to EU standards. But that would be wrong. For example, breakfast cereals will not have to have NFEU marks, as they are not included within the regulations, but it won’t mean that they meet EU standards (nor will it mean that they don’t).

The issue here is that NFEU labelling is only legally necessary for those products (effectively, perishable products) which are eligible to use the ‘green lane’ from GB to NI under the Northern Ireland Retail Movement Scheme. But, even here, there is a further complexity because, judging by experience in NI so far, retailers are going to choose to mark all products as NFEU, even though they are not obliged to. The reason, I assume, is that given the complexity of the regulations, it is much easier to make sure the retailer doesn’t fall foul of them at store level by simply marking everything NFEU.

What about future divergence?

It may be that, over time, there will be greater divergence between UK and EU standards, making it more likely that the first of the three conditions, listed above, for an NFEU label meaning that the product doesn’t meet EU standards is met. Clearly many Brexiters want this. But there is always likely to be industry and consumer pressure on the government not to diverge, as illustrated this week by the report (£) of supermarkets urging the government to legislate to match forthcoming EU bans on products with links to deforestation, which will affect many foodstuffs.

Moreover, even where such pressure fails, and divergence occurs, the big producers and retailers who operate within both the UK and the EU are likely to continue to follow the EU standard, and thus the third of the conditions outlined above will not be met. So their NFEU-labelled products will continue to be more likely to still meet EU standards. Of course, to sell them in the EU, without the label, such businesses would need to obtain the necessary certifications, but they would not have to create a different product line.

By contrast, in those circumstances, domestic, often smaller, producers and retailers are more likely to make and sell goods that do not meet EU standards. That is not (necessarily) because they will actively decide to do so, but because they don’t have any reason to actively make sure that their products meet EU standards, since they are not selling them there. So their NFEU-labelled products will become less likely to still meet EU standards.

But it will still be the case that there is no way of knowing if an NFEU-labelled product meets EU standards or not, and no way of knowing whether one not marked NFEU meets EU standards or not. This remains the case even if there is massive future UK divergence from EU standards. Consumers won’t avoid that by avoiding NFEU labelled products, because it will be equally true of products which are not marked NFEU. As and when UK standards change, any product sold in the UK will potentially not meet EU standards, whether or not it bears the NFEU label, and may still do so, whether or not it bears the NFEU label.

It is worth adding that this entire issue may be overtaken by events. If there is a Labour government, and if, as Labour have consistently implied, but not quite said, that government seeks and secures* an SPS dynamic alignment deal with the EU then, as I understand it (I stress this because there are so many complexities and unknowns), the entire need for NFEU labels would disappear.

Confusion abounds

The deep origins of this expensive and confusing mess lie in multiple confusions on the part of Brexiters. One of the most infamous phrases in the Brexit process was Liam Fox’s suggestion, made in 2017 when he was International Trade Secretary, that ‘this should be the easiest trade deal in history’. Most people who remember it probably think it was akin to similar hubristic claims, such as Michael Gove’s ‘we will hold all the cards’. In fact, it grew out of the belief by supposedly more ‘sophisticated’ Brexiters that the fact of existing regulatory alignment between the UK and the EU would mean that a trade deal could be struck that would effectively replicate single market membership, including the absence of many non-tariff barriers (i.e. including regulatory and standards divergence).

As I discussed at the time of Fox’s comment, it was nonsense, and it has never really gone away. Some Brexiters, lamentably including David Frost during the Brexit trade negotiations, simply can’t seem to understand that the issue isn’t just about the actual standards of products, it is about being part of the systems that certify, register, and uphold those standards. Ironically, it is this same lack of understanding which creates confusion amongst those assuming that the NFEU label necessarily means that the product doesn’t meet EU standards.

Perhaps more importantly, the confusion, or something like it, seems to inform current Labour policy. Leaving aside SPS, where, as noted, that policy is most likely one of dynamic alignment, Labour seem to think that continued regulatory alignment in general is a way of solving the problems of Brexit. If so, that is only half-true. It is true that maintaining alignment with the EU (not as part of a specific agreement, but simply by unilateral UK shadowing of EU regulations and standards) will make life easier for British businesses and other organizations, to the extent that it does not force them to produce to two sets of rules. Though, even then, the benefit may not be huge since, as noted above, in practice many firms will simply follow EU rules – the case of arsenic levels in baby food being one recent example. However, more fundamentally, alignment in itself does not enable UK products to be sold freely in the EU because, to repeat, it’s not just about the standards, it’s about being part of the systems around the standards.

The other deep root of the NFEU situation, of course, is the Brexiters’ persistent refusal, going back to before the referendum, to understand or to be honest about the implications of Northern Ireland for (hard) Brexit, and vice versa. That is what ultimately led to the Windsor Framework and NFEU labelling, and also, indirectly, to the government decision to sweeten the pill for unionists by rolling out that labelling across in GB as well as NI, even though it didn’t have to and, anyway, the unionists are not impressed by it.

Against this background, British consumers can hardly be blamed if they, in turn, are confused by the labelling, and falsely, but quite understandably, take it to be a mark of inferior produce. It’s easy to see how ‘Not for EU’ will become interpreted as ‘not for you’. If that leads to public consternation, and deepens the unpopularity of Brexit, then it will be an irony the Brexiters richly deserve. They have endlessly deceived themselves and the public by treating hugely complex issues of international trade and supply chains in highly simplistic and deeply misleading ways, and they have also endlessly demanded that the UK diverge from EU standards.

So If the public are now misled by the NFEU labels, which arise from this complexity, and simplistically take them to mean that Brexit has made the food they buy unsafe, then the Brexiters will have no one to blame but themselves.

 

 
*It is an important question as to whether the EU would now agree to such a deal. It’s true, as noted earlier, that this was offered to the UK, but that was in April 2021 in the context of the unresolved NIP disputes. That may not still hold good post-Windsor Framework, which the EU may well regard as having settled matters to its satisfaction. It is certainly the case that Labour will not secure an SPS deal if, as some statements have suggested, it has in mind a ‘New Zealand-style’ equivalence regime – which has already been proposed by the UK and rejected by the EU. The difference between ‘dynamic alignment of regulation’ and ‘regulatory equivalence’ is, again, a very complex issue, as explained by a House of Commons Library research briefing.

Note: I’m not 100% sure yet, but I don’t think there will be a post next week.