Brexit: How ShelfNow Gets European Products To Your Shelves
Brexit has been a seismic change for much of the food and beverage industry. It has caused significant disruption to the labour market and to food imports and exports, particularly for chilled and frozen goods. There is now significantly more red tape involved in moving these types of products out of Britain and into the EU, and vice versa.
The most striking and dramatic changes have come in the agri-food sector. Since the end of the transition period, EU-issued import and export licences have expired in the UK and UK-issued import and export licences have expired in the EU, with the exception of licences issued under the framework of WTO tariff rate quotas. For more info, read here.
However, non agri-foods (which make up the bulk of ShelfNow-listed products) have also faced difficulties which are particularly onerous for small scale and new producers trying to explore the UK market for the first time. There are two main aspects of the new UK-EU trading relationship that affects non-agri foods:
- Rules Of Origin. To send their produce to the UK, EU producers need to show proof that all the constituent parts were made in the EU. These declarations must accompany the product across the EU-UK border. Up until now these declarations have not been checked fully but they soon will be. This will have two main effects for EU producers: it will mean more paperwork and admin, and it will slow shipping down.
- Import VAT. EU producers will have to pay import 20% of VAT when sending produce to the UK which they can’t claim back unless they are VAT registered in the UK. They can either try to pass the cost on to the buyer, absorb the cost, or go through the process of registering. For an EU producer that either means accepting a competitive disadvantage, dramatically reducing margins, or diving into yet more admin and paperwork.
These new complications, on top of the industry-wide disruptions caused by the HGV driver shortage, can make life much more difficult for EU-based producers of non-agri food products. This is especially true for smaller businesses.
At SheflNow we do our best to help our producers navigate these challenges.
How ShelfNow Helps EU Producers Sell In The UK
We work with some fantastic producers across the EU and the UK is a hungry market for what they make. It has always been important for us to make life as easy as possible for buyers and producers to connect and we do this in the following ways:
- Partnership. We form close partnerships with EU producers and actively provide advice and guidance on accessing the UK market. We advise our producers on the paperwork needed, such as rules of origin and, if they want to, how to register for VAT in the UK. Many of our producers are small-scale new ventures and therefore would rather eat the VAT cost rather than register while they explore the UK market’s opportunities. In this case, we help by keeping their setup costs low.
- Fulfillment. We enable our EU producers to book fulfillment services on a flexible basis in accordance with their likely demand - small producers can make use of our warehousing space with as little as a quarter pallet of stock. This means their shipping into the UK can be done periodically, thereby allowing them to fill out import paperwork for a bulk of stock at once, rather than for each order. Our buyers can then benefit from immediate deliveries from the stock we hold in the UK on behalf of the EU producer.
There’s no denying that Brexit has made it harder for the UK and EU food markets to connect. But with our approach we make it as easy as we possibly can for our producers to thrive in the UK.