What Brexit means for wholesalers

The implications of the 2008/9 recession offered some 11th hour resilience from the Covid pandemic, but now there’s another challenge for Essential Trading: Brexit. As Covid becomes somewhat normalised, Brexit reports are returning to broadcast networks, once again reminding us of government memorandums on a new trading climate.

A considerable lack of clarity, last-minute agreements and apparent clumsiness from our government (and a rather unfazed EU), have meant that preparations for the new trading arrangements have been challenging.

Having recognised the potential limitations of Brexit early on, we have been readying ourselves for some considerable time, but disquiets remain. As a business that is fundamentally based upon moving items, homeworking hasn’t been fully possible during the Covid pandemic. To comply with social distancing guidelines, warehouse staff adopted a split-shift rota to meet customer orders. Gone are 6am and 8am start times, replaced by staggered shifts commencing at a bleary-eyed 5am.

The majority of orders have been satisfied and expectations surpassed, although it has had an impact on the workforce. Absenteeism increased as irregular working patterns sustained, but the resilience has been incomparable, with other departments helping to pick products during uncharacteristic hours.

The sales department processing customer orders were subject to reorganised rooms, while our drivers delivering throughout the UK were instructed not to enter customers’ premises, instead arranging a designated drop-off point on the grounds. Thankfully, a compassionate customer base recognised this necessity and the change has been wholly embraced.

One major income for the business is on hold, however. A collection service for a select few customers remains suspended until further notice, despite a recent safety audit declaring the entire location as ‘Covid-safe’.

And then there’s Brexit. There are shared concerns from many UK businesses akin to Essential. We import a substantial amount of produce from around the world, particularly from the EU. Due to the warmer climates that many of our neighbours’ enjoy, we have a long-term affinity with many EU producers of organic foods, but some German and Polish hauliers are already hindered at ports.

Recognising that shortages could become commonplace, we began stockpiling many own-branded products in preparation during the latter half of 2020, but it’s not only the delays that are an apprehension. To clear customs and meet paperwork requirements, we are expecting to pay a further £250 per load on imports from some EU destinations plus a charge on fumigated pallets.

Essential prides itself on an impressive catalogue of organic produce and maintains some sought-after import and distribution monopolies. However, the trading agreement between the EU and the UK on organic food was not “oven ready” and we’ve currently suspended the export of any organic products to the EU due to a £150-a time health certificate requirement.

Labels and those of our suppliers need to be EU-compliant and include an EU trading address, and until 24th December 2020, there were uncertainties about which organic logos were viable for organic certification in EU and UK markets. Having now established an EU trading address with a valued Italian customer, our labels are now being redesigned. Quite a feat when considering our 4000+ product lines.

In addition, there are questions surrounding COIs (Certificate of Inspection) on organic goods. Export customers need to register for traces in order to import goods from the UK and are further required to complete an in-depth form detailing commodity codes, country of origin and such like. The cost of new paperwork, including customs declarations required on goods being traded, is another consideration and may result in extra duties for customers, dependent on what they buy.

The complications of buying from the UK and any corresponding increases in pricing may well make the UK a less attractive county to trade with and trepidations can’t be ignored. The wholesale food industry is one that has managed to withstand the Covid-19 storm, but Brexit represents an entirely new challenge. Essential Trading’s
presence and experience has allowed buoyancy, and this is thankfully expected to continue. However, the entire sector is yet to be tested.