Brexit - How high are the stakes?

  Brexit – how high are the stakes?    When Britain submitted its notice to withdraw from the EU in March 2017, one of the biggest issues became border control and movement of horses, particularly between the EU Republic of Ireland and its bordering British Northern Ireland. A hard border between the adjoining counties of Ireland presents its own physical and political difficulties, but any restriction on the movement of horses between Ireland, Britain, and mainland Europe gives rise to problems that affect us all.     The uncertainty of border control also impacts on the safety of the national herd and disease control. The main principle of the Tripartite Agreement was to prevent the spread of disease and that, as Irish Horseracing Regulatory Board’s chief veterinary officer Dr Lynn Hillyer reminds us, is crucial and arguably the biggest issue when it comes to Brexit negotiations.    Currently, 10,000 horses move freely between the UK and Ireland every year. Seven thousand horses move overland between the Republic of Ireland (EU) and Northern Ireland (GB); 5,100 horses move between Ireland and France, the majority using Britain as a land bridge; and 5,000 horses move between Britain and France, according to Horse Racing Ireland (HRI) figures. Such freedom of movement is dependent upon the Tripartite Agreement, which will no longer be valid after 30th March 2019.    The Tripartite Agreement simplified the travel of horses between France, Britain, and Ireland and reduced the cost of moving horses between the three countries, allowing racehorses to be shipped without pre-movement veterinary checks and certification, and without the requirement for isolation and quarantine periods at their destinations.    “It’s not just about movement, it’s the protection of the herd against disease, and it’s absolutely critical that’s protected,” warns Dr Hillyer, who has been working with her French counterparts in ensuring that safeguards are in place in advance of the end of the Tripartite Agreement. “There has been added pressure on us because of the enormity of movement involved.”    Adding to the difficulty in resolving issues has been the British government’s reluctance to commit to decisions and state definite demands. MEP Mairead McGuinness has been advocating on behalf of Ireland and warned in January at the Irish Thoroughbred Breeders Association (ITBA) National Symposium, “We hope when we sit down to negotiate, common sense will prevail, but the EU is not prepared to tweak its principles to accommodate the UK. If we cannot overcome our problems, there will be real difficulties for your industry.”    Fortunately, there has been a concerted team effort between all sectors of the thoroughbred industry in France and Ireland as they united to draw up a proposal to replace the Tripartite Agreement. Rather than sit back and wait, they decided to put together a draft for an improved alternative to the Agreement, the High Health Status (HHS) document for horses. “What is lovely is how the racing bodies and breeding associations have all pulled together, and that’s something that has come through the talks really strongly,” Dr Hillyer says.    Working with the Turf Club were HRI, the ITBA, Horse Sport Ireland – the representative body for the sport horse sector of show jumpers, dressage, and eventers – and France Galop. Paul Marie Gadot, head of the horses and control department at France Galop, explains, “The EU Commission draft doesn’t fulfil all our wishes as the breeding stock isn’t included in their proposal. A lot of work is still to be done. To be clear, we are working on an expedited movement system for high health horses.    “Currently, we are going to suggest a solution to the European Commission, which is working on the new legislation regarding movements of horses in the European Community and with the third countries. Actually, we are trying to address the modification of the European Law regarding horse movement, which isn’t linked to the Brexit negotiations. This way is more technical and also safer. I will be happy when a new system allowing easy horse movements will be in place.”    Both Dr Hillyer and Gadot have been happy with the level of awareness and support from their respective governments. “Our contacts in the Department of Environment, Food and Rural Affairs (DAFRA) have been fantastic and their response to our queries have come back by return,” says Dr Hillyer.    “The public information seminars here are probably less frequent than in Ireland,” agrees Gadot. “The preparatory work is done with the representatives of the equine industry, especially at racing and breeding levels, and we are in permanent contact with the hard core in charge of preparing the future of racing and breeding in Ireland and UK.     “We maintain close discussions with the French Ministry of Agriculture. Facing us, they are very helpful and supportive, but they aren’t the decision makers in the Brexit negotiations. They have to be prepared for the different evolutions of this dossier.”    Brian Kavanagh, CEO of HRI and among those at the forefront of the HHS proposal, has expressed some anxiety at the political instability of Britain and fears that “things outside of our control could influence things.” He is cautious and fears the HHS may still be derailed between now and next March if Brexit negotiations turn sour.    “HHS has great potential to be better than the Tripartite Agreement,” Dr Hillyer enthuses. “It will ultimately improve matters, because it creates strong traceability and accountability. The Tripartite is a fantastic blueprint, but underneath it is the recognition of the importance of health and welfare. We knew we had to move on this and be prepared in advance, rather than simply sit back and wait. We looked at the principles of the Tripartite Agreement as well as the High Health, High Performance (HHP) already in existence for Sport Horses and saw an opportunity to shake them up a little and improve upon both.     “HHS allows for the moving of animals with an equivalent health status to countries with the same level of guarantee regarding disease control and vaccination. It’s now on its way to be presented to the EU Commission and, of course, I’m very hopeful it will be well received. It solves the potential problems and is a logical document, building on existing structures.”    The racing and breeding bodies may have united well to form the HHS proposal, but it also needs to be seen through, if it indeed does replace the Tripartite Agreement. This will require further cooperation between all stakeholders.    “We need to ensure we put in place the practicalities that are set out in the document,” Dr Hillyer warns. “It’s about making sure we do exactly what it says on the tin. It will require full veterinary engagement on the ground. Veterinary Ireland are already very aware of this and we are in dialogue with its representatives. We are also in discussions with the Association of Racecourse Veterinarians and the small sub-groups of vets, and it’s a very dynamic group. Everyone is putting a lot of consideration into what it is we have to underpin.    “The principles of the HHS document are already enshrined in the Code of Practise for thoroughbred breeders, but we don’t have a Code of Practise for the training side and we need to do that. A lot of trainers do it in an informal way already and this will simply provide the checks and balances.    “It is built on identification, through the microchip, passport, and crucially the markings. These checks are already in the Rules of Racing and there is a reason why they’re in the Rules. We need to keep on top of our health status and keep our ship in order if we want to be able to freely move our animals.    “We are looking closely at equine influenza vaccination, and trainers probably feel we are excessive in correcting what appear to be minor errors in dates, but we need these checks and balances, and having vets working with trainers across the country is so important.”    The first step, of course, is in seeing the HHS in place for March 2019, but seeing it adhered to will involve paperwork and documentation that is already being looked at, for solutions to make the processes simpler, quicker, and, importantly, error-free.    “Weatherbys is particularly proactive and we have had a lot of support from chief executive Russell Ferris,” reveals Dr Hillyer. “They are looking into a digital solution. A slick database into which all the details can be entered, with less room for error. But that’s the next step. The first step is agreeing in principle to the HHS document.”    If the HHS document can resolve the issue of disease prevention, welfare, and the continued free movement of horses, what of those that take care of them? Even without Brexit, racing is already facing Europe-wide staff shortages and the inability of trainers to increase horse numbers due to the lack of skilled staff to look after additional horses. Freedom of movement and border control extends to people and, for an industry already struggling with manpower, restrictions on employing staff and movement of staff will adversely affect racing.    In France, 9,700 employees work directly within racing industry, with a further 29,290 indirectly employed, while in Britain 17,400 core industry employees make up a total of 85,200 direct and indirect employees. The Irish sector core is formed by 15,200, totalling 28,900 of direct and indirect workers. Provisions need to be made for staff as much as for the horses they take care of.    Paul Marie Gadot doesn’t perceive it a threat in France, but is aware it may cause problems in Britain. “Currently we don’t believe that Brexit would impact staffing in France, but it could probably impact staff movements with the UK. Because the negotiations are progressing very slowly, it is difficult to imagine all the consequences.”    Rupert Arnold, CEO of the National Trainers Federation (NTF), is in no doubt that it could have a negative impact on British racing. “A lot of work has been done by the Brexit Steering Group for the racing industry, headed by Julian Richmond-Watson, chairman of the TBA, and a lot of progress has been made,” Arnold says. “Arguably the number one issue to do with Brexit is how it will impact on staffing. Discussions are continuing and the industry has made representations to the government regarding the immigrant policy post-Brexit. Racing needs highly skilled people with certain attributes, wherever in the world they are. We have demonstrated the need for that. It’s a highly charged issue and racing has to make its case and the need for migrant staff.    “The NTF and BHA are working together to communicate to government the industry’s requirements from a future immigration system. We have demonstrated that, while proactive steps are being taken to counter the current shortfall of available staff through domestic recruitment, it is important for British racing to still be able to have appropriate access to the best internationally skilled workers in the short-to-medium term. British racing has made these representations to the Migration Advisory Committee call for evidence on the impact of EEA workers in the UK labour market, which will inform future Home Office immigration policy.    “We know the serious shortage of skilled staff is probably the number one concern for many trainers. A key factor behind the shortage was the government’s decision to change the rules for migrant workers in 2011, leading to work riders being removed from the Shortage Occupation List. Brexit has the potential to make matters worse if it puts in place more obstacles for EU workers to be employed in British racing stables.”    The BHA continues to explore opportunities for raising the profile of the industry on these issues and has provided written evidence to the House of Lords EU Home Affairs sub-committee inquiry on people movement in the fields of sport and culture.     Britain already has a registration system in place for the three million EU workers currently in the country, and their rights will be protected. With regard to staff taking horses abroad to race, Arnold can’t see that it will be any different to currently and doubts it will be an issue.    “It’s in the nature of Brexit for issues to arise that haven’t been foreseen,” he observes. “The Northern Ireland border is also going to be an issue and the biggest stumbling block in the whole process.”    When it comes to the Northern Ireland and Republic of Ireland border, hard or otherwise, an added complication is the fact that HRI has always operated on an all-island basis. Downpatrick and Down Royal, the two racecourses in Northern Ireland, come under HRI jurisdiction and 90% of the runners at their fixtures are trained in the Republic of Ireland. All Northern Ireland-based trainers are licensed by the Irish Turf Club, and thoroughbreds foaled on Northern Irish stud farms have the suffix IRE and are not qualified for British breeders’ premiums.    Taking horses across the border to race in a non-EU country could become problematic, but taking them across the sea to mainland Britain may simply no longer be cost effective. Republic of Ireland-based trainer John McConnell has enjoyed great success with runners in Britain, sending across 33 horses in the past five seasons to win 17 races and be placed in a further 15, bringing back over £70,000 in prize money.    “So far, it’s been the same as any other year,” McConnell says, “nothing has changed and we’ll be over there regularly through the summer.” He takes the view “we’ll worry about it when it happens,” and he is optimistic the HHS will retain the current freedom of movement.    “The need to move horses back and forth is the same for all parties – French, Irish, and British – and we’re all working towards the same goal, so I’m pretty hopeful that can be achieved. It’s in everyone’s interests.     “If it doesn’t happen, taking horses across to Britain will still be possible. It will just depend on how much paperwork is involved and whether it becomes more expensive. That added cost will have to be factored in. I’ll still be going over for the sales, but any extra cost in fetching a horse back will have to be added to the purchase price. It won’t affect the bigger buyers, but it will affect small trainers.”    Ireland may have been busy with Brexit roadshows and industry dialogues, but in reality, public discussions have been supposition and, as McConnell points out, of no help at grass roots level. “We’re hearing information from the media, but there has been no communication between HRI and trainers. People are lobbying on our behalf, but there’s nothing coming back down to us.”    Even more in the dark are those vital to the industry, but not directly involved: the suppliers who export such necessities as bedding, feedstuffs, supplements, horseboxes, veterinary products, and tack, and the horse transporters themselves, who are already familiar with the challenges of moving animals internationally.    The economic value of the racing industry to the three racing countries most affected by Brexit cannot be underrated. The European Federation of Thoroughbred Breeders Associations (EFTBA) estimates the French industry to be worth €2.3 billion. The 2017 Deloitte report in Ireland shows €1.05 billion. In Britain, the economic impact was set at £3.5 billion (€3.97 billion) by the 2013 Deloitte Report, the most recent of their five-yearly reports.    It was estimated that £150 million of the £221 million spent at Tattersalls Sales in 2012 were made to non-British buyers from over 50 countries, acknowledging significant Irish buyers without specifying amounts.    Britain is Ireland’s biggest export market, taking eight out of every 10 thoroughbreds that are sold abroad. Irish vendors reaped €338 million at bloodstock sales in 2016, and 50% of that value was amassed at British sales, with 4% coming from sales in France. Any threat to the sales, either through increased transport costs or through new tariffs, will be a threat to the economy of the countries currently trading.     Unfortunately, as vital as the thoroughbred industry is seen by us to the economy, it fails to figure in any of the countries’ leading exports. According to the CIA World Fact Book, the top 10 Irish exports accounted for over 85% of all its exports, worth €114.5 billion, and livestock was not among them. Neither was it among French exports, valued last year at €443.5 billion.    British exports in 2017 totalled €377.5 billion and, again, livestock wasn’t among its 10 highest exports, which between them accounted for over 70% of its exports. Trading with the EU, however, must still be a British priority, as 54.4% of UK exports by value went to the EU, compared to 22.6% to Asia and 15% to North America.    Interestingly, French and British exports each make up 30% of their GDP, but Irish exports represent a massive 120% of its GDP, with 57% going to other EU countries. North America accounted for 29% and 10.5% went to Asia. Pharmaceuticals lead Irish exports and MEP Mairead McGuinness has pointed out that this sector is also dependent upon the same terms as the Tripartite Agreement.    Companies trading throughout Britain and Europe, however, appear optimistic, and business seems to be continuing as normal, despite the uncertainty of the future. Those we might expect to have the greatest concerns are the horse transport companies, yet Liz Mulroy of Horse France is typical of the operators when she says, “We’re currently moving breeding stock back to France from Ireland and it’s business as usual.”    Her counterpart in France, Simon Bressollette, road operations of STC Horse France, is in the same position. “At the moment we have no difficulties and the rules are the same. We are still waiting for the HHS document to be accepted and to see whether the rules will change in the future, but we just don’t know.”    The general feeling is that until a document such as the HHS is officially agreed, no one knows what the way forward will be. There are simply no procedures currently in place, no contingency plans, but that uncertainty isn’t having an adverse effect on business as yet.     “I’m afraid I’m another head-in-the-sand when it comes to Brexit,” admits Tim Smalley, CEO of Bedmax, echoing many others. “Not even the leaders know, and we can’t discount what might happen, so it’s a matter of keeping your house in order and being prepared for the worst-case scenario. We are trying to keep our business, finances, and customers in order and ensure a strong ship for the waters ahead.    “My three biggest concerns would be the exchange rate and what might happen to sterling; tariffs and documentation; and foreign workers. The exchange rate would be a worry and losing half my staff would be a worry, we have many good Polish workers and some at management level. We have to hope that tariffs would not be too high, but my impression is that it might take a bit longer, but we’ll still be able to get out.”    Bedmax has been exporting bedding to Europe for over 15 years and exports to leading trainers throughout Ireland, but it also exports further afield, and office staff are already familiar with the form-filling involved in non-Eu exports. “We have a decent non-EU export business and if we have to transfer to non-EU, so be it,” Smalley accepts.    Speaking on behalf of Connolly's Red Mills, Gareth Connolly was another typical of many industry suppliers in reporting “business as usual,” but he is very conscious of the uncertainty and possible negative impact on the horizon.    “People are worried, obviously, but it’s not impacting on business. You just have to get on with it and get stuck into it. From an Irish point of view, I do feel it’s going to have a negative impact, whatever the tariffs and restrictions will be once they are in place. It is going to feedback on the industry and we’re already trying to compete with other industries, so it will be hard.    “We have a team in the UK and we see Brexit as a backward step for us. It has the potential to damage the entire equine industry, including worldwide because it’s such a small community.”    He is conscious of existing customers and will endeavour to ensure the same quality of service, regardless of any problems looming. “For our UK customers, we are providing the same service as always and we will continue to do,” he says.    Trading with a non-EU country, though not without its problems, is a challenge Connolly’s Red Mills embraces.    “We are the only foreign supplier of equine feed and supplements into China, and that continues to be difficult in terms of regulations and compliance,” Connolly admits, “but we’ve embraced that challenge and will continue to do so, whatever barriers of entry are put in place, we set as a priority to overcome.    “Requirements are there for a reason and you need to be fully compliant, and these are the key points when you go into other countries. For our company, welfare of the horse is paramount and we will conduct whatever testing is required to ensure full compliance and the quality of our feed and supplements.”    We are reminded of Dr Hillyer’s regard for the unity of the stakeholders and it is clear from Connolly’s statement that, for once, everyone is singing from the same hymn book.     “If the UK is a third country, then so be it,” he concludes. “It is still our biggest export market and we will continue to export.”

By Lissa Oliver

When Britain submitted its notice to withdraw from the EU in March 2017, one of the biggest issues became border control and movement of horses, particularly between the EU Republic of Ireland and its bordering British Northern Ireland. A hard border between the adjoining counties of Ireland presents its own physical and political difficulties, but any restriction on the movement of horses between Ireland, Britain, and mainland Europe gives rise to problems that affect us all.

The uncertainty of border control also impacts on the safety of the national herd and disease control. The main principle of the Tripartite Agreement was to prevent the spread of disease and that, as Irish Horseracing Regulatory Board’s chief veterinary officer Dr Lynn Hillyer reminds us, is crucial and arguably the biggest issue when it comes to Brexit negotiations.

Dr Lynn Hillyer

Currently, 10,000 horses move freely between the UK and Ireland every year. Seven thousand horses move overland between the Republic of Ireland (EU) and Northern Ireland (GB); 5,100 horses move between Ireland and France, the majority using Britain as a land bridge; and 5,000 horses move between Britain and France, according to Horse Racing Ireland (HRI) figures. Such freedom of movement is dependent upon the Tripartite Agreement, which will no longer be valid after 30th March 2019.

The Tripartite Agreement simplified the travel of horses between France, Britain, and Ireland and reduced the cost of moving horses between the three countries, allowing racehorses to be shipped without pre-movement veterinary checks and certification, and without the requirement for isolation and quarantine periods at their destinations.

“It’s not just about movement, it’s the protection of the herd against disease, and it’s absolutely critical that’s protected,” warns Dr Hillyer, who has been working with her French counterparts in ensuring that safeguards are in place in advance of the end of the Tripartite Agreement. “There has been added pressure on us because of the enormity of movement involved.”

Adding to the difficulty in resolving issues has been the British government’s reluctance to commit to decisions and state definite demands. MEP Mairead McGuinness has been advocating on behalf of Ireland and warned in January at the Irish Thoroughbred Breeders Association (ITBA) National Symposium, “We hope when we sit down to negotiate, common sense will prevail, but the EU is not prepared to tweak its principles to accommodate the UK. If we cannot overcome our problems, there will be real difficulties for your industry.”

Fortunately, there has been a concerted team effort between all sectors of the thoroughbred industry in France and Ireland as they united to draw up a proposal to replace the Tripartite Agreement. Rather than sit back and wait, they decided to put together a draft for an improved alternative to the Agreement, the High Health Status (HHS) document for horses. “What is lovely is how the racing bodies and breeding associations have all pulled together, and that’s something that has come through the talks really strongly,” Dr Hillyer says.

Working with the Turf Club were HRI, the ITBA, Horse Sport Ireland – the representative body for the sport horse sector of show jumpers, dressage, and eventers – and France Galop. Paul Marie Gadot, head of the horses and control department at France Galop, explains, “The EU Commission draft doesn’t fulfil all our wishes as the breeding stock isn’t included in their proposal. A lot of work is still to be done. To be clear, we are working on an expedited movement system for high health horses.

“Currently, we are going to suggest a solution to the European Commission, which is working on the new legislation regarding movements of horses in the European Community and with the third countries. Actually, we are trying to address the modification of the European Law regarding horse movement, which isn’t linked to the Brexit negotiations. This way is more technical and also safer. I will be happy when a new system allowing easy horse movements will be in place.”

Both Dr Hillyer and Gadot have been happy with the level of awareness and support from their respective governments. “Our contacts in the Department of Environment, Food and Rural Affairs (DEFRA) have been fantastic and their response to our queries have come back by return,” says Dr Hillyer.

“The public information seminars here are probably less frequent than in Ireland,” agrees Gadot. “The preparatory work is done with the representatives of the equine industry, especially at racing and breeding levels, and we are in permanent contact with the hard core in charge of preparing the future of racing and breeding in Ireland and UK.

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