Better to be working through problems, than worrying in anticipation of them
This time last year, Brexit looked set to the be main source of national anxiety as politicians, media outlets and, most importantly, businesses both sides of the English Channel nervously tried to predict the terms and subsequent consequences of the UK leaving the European Union.
Whilst the arrival and restrictions of Coronavirus pushed Brexit into a poor second place in the nation’s psyche, for businesses such as us, the EU issue was still at the forefront of our minds.
‘I suppose the impact of Coronavirus has been on customers, sales and demand, whereas Brexit was at the centre of our internal operations, purchasing and distribution’, explains Chief Executive, Gary Smith. ‘Whilst you could argue we were under threat from both angles in 2020, if we did not sort out the import of products from the EU, it would not matter if there was demand or not. We need to acknowledge that the UK is heavily reliant on imports in order to meet its consumption of meat and poultry, the UK simply not having enough capacity to produce enough quality product.’
Work on the issue of Brexit began in earnest back in 2016, as soon as the result of the UK referendum was announced. ‘To be honest, from the moment Brexit was being talked about, we were on alert,’ says Operations Director, Max Prudon. ‘We work with poultry brought to us from Eastern Europe, beef from the Republic of Ireland and even our South American produce comes to us through Europe’.
As it became initially clear that there would not be a quick resolution to Brexit, and as time went on any deal would be made at the last minute, we developed a policy of preparing for the worst-case scenario.
‘We found great support and guidance from the International Meat Traders Association, which shared expertise and advice through events and conference calls, but I cannot tell you the number of times we had to scrap our plans and start from scratch’, explains Max.
‘It was only eight months ago when the introduction of new software made all our existing plans obsolete. You had to forget everything that was done before and start again. Aside from the wasted time, effort and money, you had to manage your own personal frustration and disappointment each time you were taken back to square one’.
We were continually preparing our business for new tariffs, additional charges and making adjustments across all our systems for real pricing after leaving the single market.
‘Our major advantage has been our sister company ‘Tropics Cargo’ located in Belgium’, says Max. ‘Having a dedicated transport company located in Europe, has meant we can continue to import as efficiently as possible with vehicles operating under the same business and bringing meat directly to our chilled storage warehouse in Banbury. I cannot imagine what companies without such a facility are going through’.
Tropics Cargo has also given us a unique perspective from both sides of The Channel. Having always handled its own import and export procedures, and carefully managing its agent for international administration, the inhouse team is now adjusting to the terms of the deal that was struck last month.
‘Whilst the deal does cover our industry and work, prices for products arriving from South America and Australia via Holland and Germany have risen by roughly 25%’, explains Gary. ‘As we move forward, it is likely we will enter into discussions about direct transport routes to reduce these new costs, but it will take three or four months for distribution chains to find their feet and be in a position to talk about connections with UK ports. We are ready when they are’.
Whatever the future solutions, the increases in price due to import and export declarations will become a permanent cost, meaning smaller consignments will inevitably incur a proportionally bigger price increase, with the volumes that we import this is having a minimal impact but smaller importers will be hit harder.
‘In a way, this has reminded me of the fearful lead up to the turn of the millennium and the threat of the ‘Year 2K Bug’, but we all woke up the next day, realised things were not as bad as we feared and got on with it. It certainly feels better to be working through problems, than worrying in anticipation of them’ says Gary.
