Losses in warehouse: production losses
In general the loss of goods through production, for example losses occurring through certain types of handling, can be treated as non-chargeable losses under SPE15185, unless as a result of a Usual Form of Handling see SPE15335. You should however ensure that such losses, if a regular occurrence, were requested at the time of application for authorisation (box 21 of SP2) and are detailed in the authorisation letter. (Authorisation must be obtained prior to any loss rate being applied.)
Any losses in excess of those detailed in the authorisation should be investigated thoroughly to ensure that a genuine loss has occurred, and the loss is not an attempt to avoid other customs requirements, for example licensing or anti-dumping duty.