2. Biz Network June 2021 39-80.qxp_Chamberlink 01/06/2021 09:09 Page 42
INTERNATIONAL TRADE
Exporting food and drink after Brexit Food and drink is one of the UK’s most important industries, contributing £23bn to the economy in 2019 via exports to 220 countries – led by Ireland, the United States and France. With Brexit having a profound impact on international trade for companies in the industry, Business Network speaks to businesses working with the Chamber to overcome disruption.
EMMA ROBSON, DIRECTOR AT BAT AND BOTTLE WINE MERCHANTS, BASED IN OAKHAM, RUTLAND What does your company do? We are a fiercely independent wine merchant – a micro-business led by a husband-and-wife team that established Bat and Bottle almost 27 years ago. Specialising in Italian wines, we buy and ship directly from artisan wine producers, and sell directly to the UK public and a few UK restaurants. How has the way you trade internationally changed since Brexit? The way we trade has not changed – we buy from the same suppliers and use the same shippers. However, additional data is now required and the number of “movements” that must be recorded duty-wise for one shipment, for HMRC purposes, has increased from one to three. The Department for Environment, Food and Rural Affairs (DEFRA) is setting new labelling requirements. Current proposals include making it compulsory for all text to be in English language – those we use are currently in Italian – and possibly also declaring the number of calories and other information that, although perhaps deemed suitable for high-volume wines, we fear will be impossible to adhere to when buying small parcels from artisan producers. The cost of translating, printing and changing the labels on every bottle imported will be prohibitive. This genuinely could mean the end of special, unique, artisan wines from small producers being available in the UK, possibly within the next two years. What have been the biggest challenges this has posed for your business? Apart from the obvious fear of new labelling laws and the inevitable increase in costs due to increased paperwork, time taken for wine in transit has become the new unknown. Despite having done our pre-Brexit research and invested in all the necessary software and licences, it took until the very end of April for our first 2021 order to arrive into our warehouse. Since then, a standard groupage shipment – which previously took up to two weeks – currently takes four weeks from order to our warehouse. Training on the new software, and integrating our licences, has also been a huge challenge. How have you responded to these challenges? We have used customs clearance agents until our warehouse ID for the HMRC’s customs declaration service software is issued, and are now considering making this permanent practice. It’s inevitable this will drive our costs up further, which will be passed onto the end consumer, but we are fast becoming convinced that this is a contracted-out service worth paying for and will probably abandon the software we have purchased. We have been in touch with East Midlands Chamber as a possible authorised customs clearance agent to act on our behalf.
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business network June 2021
MAX VAUGHAN, CO-FOUNDER OF WHITE PEAK DISTILLERY, BASED IN AMBERGATE, DERBYSHIRE What does your company do? We are the East Midlands’ first full-scale craft whisky distillery, employing seven full-time staff. We also offer tours, and produce a range of other spirits, including gin and rum. Describe your experience with exporting to date? We made our first export in late 2020 to a specialist spirits distributor and retailer, based in Germany, ahead of the changes introduced following Brexit. What are your future plans with regards to exporting? We are launching our single malt whisky in winter 2021 and our short-term sales plans have mainly a domestic focus, but we have importers interested in our whisky in various EU countries and plan to start small volumes in late 2021. In the long term, we expect these export markets to be a significant part of our business and our aspirations extend to major markets such as the US. What are the biggest challenges you are anticipating in this regard? The biggest challenges we see in the short term with our EU partners are around alcohol duty, VAT and packaging, including additional and more bespoke labelling requirements. Under previous EU-wide arrangements and systems for duty and VAT, these aspects were relatively straightforward and there were only a few minor regional differences in product description requirements. Post-Brexit, these aspects are challenging for small producers and can involve significant additional costs for each country of export. For UK independents with lower export volumes, it becomes difficult to work with like-minded EU independents. It’s also apparent that interpretation of the new rules is varying from country to country in the EU. What are you doing now to prepare yourself for these challenges? We’re currently reviewing all the guidance being issued by the Government and HMRC, while maintaining a dialogue with exporters in our sector, so we can benefit from the learning curve of others ahead of starting our whisky exports. We are taking advice on offer from East Midlands Chamber via its Brexit support programme. This should have a positive impact due to the expertise available directly from the Chamber or through its network.
