8 minute read
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. 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.
Dual use? SAD form? The jargon you need to know
With so many acronyms and code words, understanding some of the terms associated with international trade can be a challenge. Lucy Granger (pictured), the Chamber’s international services team leader, helps to clear up some common definitions with this jargon buster.
MRN: The movement reference number required by UK customs to allow goods to cross the border.
SAD form: The original form introduced into the EU in 1988 for all customs declarations. Known as the single administrative document, it is also called the C88 form in the UK. This is the “paper” document of the customs declaration and could also be called the EAD (entry acceptance advice).
Direct representative: Agents can act as direct representatives when making customs declaration for, and on behalf of, their principals. A direct representative is not legally liable for the declarations made, though they do have a duty of care in enacting the service.
CHIEF: Customs handling of import and export freight – the UK customs computer that handles all customs declarations.
CDS: Customs declaration service is the new UK customs software being developed to replace CHIEF
Incoterms: Internationally-recognised commercial terms for sale. They are published by the International Chambers of Commerce (ICC), and define the responsibility of the exporter and the importer.
Customs value: This could also be referred to as the CIF value – cost, insurance and freight.
Inventory linked: If goods are coming through a port with inventory linking, this means the customs declaration must be electronically linked to the cargo in the port before it will be released. Once the customs declaration has been accepted by customs, and correctly linked to the cargo, a message of P2P will be received. P2P: Permission to progress, meaning the goods can leave the port.
“At risk” or “not at risk” goods: Goods are deemed “at risk” when there is a risk they will be moved out of the UK domestic market in to the Republic of Ireland or the rest of the EU. Goods are “not at risk” if they are going to remain or be consumed within the UK domestic market. This occurs when trading with Northern Ireland.
C79 form: Importers can reclaim import VAT (input tax) on their monthly or quarterly VAT returns using a C79 VAT certificate.
Dual use: These goods can be anything from blueprints, spare parts, chemicals, telecommunications and machinery that can have both a military or a civil application.
Pre-lodged: This occurs when the customs declaration is submitted to a customer prior to the goods arriving.
For support on other terms or requiring a customs broker, get in touch with ChamberCustoms at East Midlands Chamber. ChamberCustoms is a nationwide compliance-led service that covers all ports in the UK, meaning the Chamber is able to act on any import instruction for goods arriving by sea, road or air to facilitate the rapid clearance of the goods. Email chambercustoms@emc-dnl.co.uk or call 0333 320 0333.
SME Brexit Support Fund coming to end
Businesses that trade with the EU have until the end of this month to apply for grants of up to £2,000 via the SME Brexit Support Fund.
The Government has made £20m available for the scheme, which offers funding towards the costs of training and professional advice to help firms adapt to changes to trade rules with the EU.
Training that eligible firms –criteria includes having fewer than 500 employees and less than £100m turnover – can use the grant on include: • How to complete customs declarations • How to manage customs processes, and use customs software and systems • Specific import and exportrelated aspects including VAT, excise and rules of origin
The deadline for applications is 30 June. For more information, visit www.customsintermediarygrant.co .uk/sme-brexit-support-fund
Training courses help prepare exporters
Grants from the SME Brexit Support Fund can be used to cover costs of courses provided by the Chamber’s international trade training team. Upcoming courses include:
10 June, 9-2
Customs declarations
15 June, 9-1
Incoterms 2020 rules
16 June, 9-12 and 1-4: Preference rules of origin relation to EU countries
23 June, 9.30-12.30:
Customs special procedures and how to save time and money
24 June, 9-3.30:
Customs procedures and documentation
