Preparing your business for Brexit
18th December 2020
It’s the final countdown before the UK leaves the European Union on Friday 1st January 2021 and, at the time of writing, it’s looking quite possible that we will have a no-deal Brexit. That’s not to say a deal won’t be agreed last minute – if this year has taught us anything, it’s to expect the unexpected.
Whether we have a no-deal Brexit or not, there are going to be changes. In fact, it’s clear that some of these changes have already started to have an impact on businesses and will continue to do so for many months to come.
The two main factors influencing disruption for our industry will be import border delays and tariffs. There are currently delays at the border for importing goods and waiting times have increased due to increased paperwork requirements. The Government will be putting in phased checks on this side of the Channel, but they will be immediately implemented on the other side of the Channel. From January-March 2021, flow rates will be at 45-65% of current levels, rising to 50-70% after 6 months. Flow rates will take between 6-12 months to reach current levels, with delays and queues during peak times.
After January 1st businesses transferring goods between the UK and the EU will need to pay duties and implement new compliance processes. Our trade with non-EU countries will also be affected by changes in duties and processes. With no trade deal yet agreed we can not be sure on the exact price increases we will be incurring; however, we are expecting increases of 30% or more on a lot of our imported goods.
This does not just affect finished goods coming into the UK either, for example, baked beans manufactured in Liverpool; even though these are manufactured in the UK, the tomato paste used in the ingredients is imported from Italy. This ingredient will have a tariff imposed on it resulting in a price increase on the product.
What is Queenswood doing to prepare?
We are anticipating a time of uncertainty and disruption in early 2021 and have appointed a specialist team to look at how best we can manage that for our business and for our customers. We have identified which of our suppliers bring finished goods into the UK and, where shelf life allows, we are in the process of increasing stock levels.
As a business, we are fortunate enough to have access to large storage space so we can effectively store excess stock. We are in a great position to adapt to the challenges ahead and to help reduce the impact for our customers.
However, understandably we cannot allow stock levels to be increased on products we import with a shorter shelf life. Imported chilled products, such as vegan meat alternatives and continental cheeses, will be impacted the most by these changes. We suggest our customers utilise the vast product range available at Queenswood and buy alternative UK sourced products to minimise the disruption for themselves.
Imported goods after 1st Jan will be subject to additional paperwork to enable port clearance. We have put in place the necessary measures to ensure no delays are caused by ourselves not being ready. For those that sell organic products, the importation of these is treated differently and involves greater level of checks and additional paperwork, so be aware that these may cause longer delays compared with conventional goods.
As a result of increased tariffs, it is highly likely that we will see an increase in some of our prices on specific stock affected. We will endeavour to keep our prices as competitive as possible, but please be aware that unavoidable delays and price increases are likely from January 2021.
If there’s one thing this year has taught us, it’s how to be resilient, adapt our strategies and plan ahead where possible. It’s been a challenging time for us all, but we will continue to support our customers through 2021 and beyond.
Key changes and useful links:
The government have set up a useful tool on their website so you and your business can get access to bespoke information and articles to help you transition into 2021. Take a look here https://www.gov.uk/transition
You can also see what changes will be applied to import tariffs from 1 January 2021, here: https://www.gov.uk/check-tariffs-1-january-2021
The UK will apply a UK-specific tariff to imported goods. This UK Global Tariff (UKGT) will replace the EU’s Common External Tariff, which applies until 31 December 2020. You can find out more here: https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021
For further details on how Brexit will affect organic trade, take a look at the government’s guidance here: https://www.gov.uk/guidance/trading-and-labelling-organic-food-from-1-january-2021