Andrew Selley: No-deal Brexit preparation
With Brexit uncertainty still rumbling on as the drama within Westminster unfolds, FWD’s chairman discusses the preparation needed for a potential no deal and the support wholesalers are being given – whatever the resolution
The new government’s firm commitment to leaving the EU on 31 October demonstrates that the food distribution sector’s investment in preparing for a worst-case scenario no-deal Brexit has been necessary. Even if [at the time of press] there’s a slim chance a deal may be reached or another extension will march us up the hill only to march us back down again, we needed to act.
This time there has been welcome recognition from government of the likely impact on food supplies if the UK moves overnight to WTO trading terms and tariffs. We’ve seen the announcement of Operation Kingfisher, a programme to help businesses cope with potential cash-flow problems, and FWD has joined other trade associations in calling for a Hardship Fund to protect supply to vulnerable people and the community groups that support them.
At Bidfood, we’ve spent the past few months working with our core-range suppliers to assess their level of preparation, flagging any availability issues with stock sourced from or through the EU. We’ve established a risk level, taking into account how critical the product is, shelf-life and seasonal considerations, the likely level of tariffs and the availability of alternatives. From this, we’re able to build contingency stocks of core range within our existing estate and additional storage space.
In the remaining weeks before the deadline, I believe the wholesale sector’s collective effort should go into ensuring our supplier partners are ready for November. All goods arriving into the UK from Europe will be classified as imports, meaning they must be customs cleared, with all duties and excise paid by each supplier. With the government looking to minimise delays at ports as far as possible, we must assist as much as possible by adhering to the new rules.
All importers will require an EORI number, as they already do for non-EU imports, and UK VAT registration. Those based outside the UK will need a UK office or agent. They will also need to send a letter to formally “empower” their logistics partner to act as a “customs representative”, determine the value of goods for customs declarations and check there are no additional restrictions or licences on the movement of their products outside the EU. For imports that are controlled, they may need to register with the appropriate body or adopt new systems, such as the IPAFFS, which will replace the TRACES system for animal products.
We’ll be asking suppliers to consider where all their ingredients are sourced from and ensure they understand what pinch points there may be in their supply.
Changes to products also need to be taken into account – will legislation changes or supply impacts mean suppliers need to review the inputs to products?
For both suppliers and wholesalers, there are plenty of government and industry resources to aid preparation. FWD recommends the Technical Notices at gov.uk, which can be filtered by business type, and the Brexit hub at brexitfoodhub.co.uk that was put together by food chain trade associations.
If we do go to WTO rules at the end of October, I think we can all agree there will be a period of disruption that will severely challenge our established processes. How long that disruption lasts will depend to a large degree on how prepared we are as a sector for all the eventualities that may confront us, and I urge wholesalers and suppliers alike not to waste this limited time.