An annual volume of 75,000 tonnes of Falklands squid (Loligo / Patagonian squid) can now be imported into the EU, for processing, with a duty of 0% according to an EU Council regulation published on Thursday.
Before Brexit, all of the Falklands’ fishery could be imported into the EU duty-free, but they lost that privilege with Brexit.
The Managing Director of Fortuna Ltd, Mr James Wallace, said: “We welcome the publication today of Council Regulation (EU) 2021/1203 on autonomous Union tariffs for certain fishery products ( ATQ). “
He explained that the deal was backdated, so the Falklands’ catches of the first season of 2021, currently in cold storage under customs bond in Spain, were included in the new conditions, subject to the rules governing the process of request.
“This is an important step for the Falklands after the imposition of the Brexit tariffs. The new agreement between the UK and the EU (the Trade and Cooperation Agreement of January 1, 2021) only covered fishery products from the UK. This development under the ATQ regulations is the first to cover products from British overseas territories.
He warned, however, that the deal was limited to products intended for “industrial processing” within the EU.
He said: “Most of our company’s Falklands squid production is wholesaled as primary processing to the restaurant industry or as a ‘chilled product’ in fish counters in supermarkets.
“Unfortunately, squid intended for sale through these main channels is not covered by ATQ regulations which are designed to help meet fish consumption needs and support the production of Union fishery products.”
Mr Wallace estimated that only around 20% was sold to EU processors for processing in the EU, where it was generally more expensive to process large quantities of squid than in third countries.
“In this small, very competitive industry, it’s the processors who import the product and take the risk of meeting the conditions, so a large part of ATQ’s initial financial benefit will go to them.
“So while we welcome it as an agreement that will primarily benefit one of our customer segments – the Union’s processing industry – it does not replace the quota-free access that the Falklands enjoyed on all their fishery products before Brexit. “
He said that previously their European customers could import the two species of squid caught in Falklands waters (Illex as well as Loligo) and the different species of fish, under a long-term suspended tariff agreement.
“Since the EU processing sector only accounts for around 20% of our annual production of Falklands Loligo squid, the EU processing market is therefore limited to around 15,000 t of the 75 000 t of average annual catch.
“It is difficult to imagine that the ATQ cap of 75,000 t is fully utilized, based on current sales trends.
“Our hopes for ATQ as a solution to Brexit tariffs are based on further discussions with the EU to broaden the definition of ‘processing’ so that ATQ regulations can apply to squid destined for other larger market segments such as as catering and retail. “