As we wrap up the first week of ‘independent’ Britain, some industries feel the effects of the new regulations more than others. Fresh produce, such as seafood now requires thorough checks at border control. As a result many seafood trailers have been arriving late due to the extended time needed at check points in France and Scotland.
Prior to Brexit, only a sample of all the produce being transported needed to be checked. Under the newly-required stipulation, the entire truck needs to be unloaded and each consignment needs to be signed-off by a vet. It has been estimated that this process takes six times longer than if only samples were being checked. These delays raise concerns about the potential food wastage that may occur with some of these more perishable goods.
Although some claim the first week of post-Brexit cross-Channel trade went relatively smoothly, there have been some technical issues, too. Due to computer problems, 25 trucks got backlogged for clearance in Boulogne on Tuesday. This had a knock-on effect on depots in the UK. The government said it was aware of “a small number of issues…due to some information not being entered correctly into UK and French systems”.
Small businesses seize trading
As many have feared, small businesses that previously were able to sell products between the EU and UK are the ones affected the most. The new VAT regulation requires those EU businesses selling to the UK to register and account for UK VAT over a certain sale value. This inevitably adds extra costs. As a result many small, niche online retailers have paused trade with the UK.
Other companies were forced to completely revise their supply chains. Aston Chemicals decided to serve the divided markets separately. They used to send a weekly truckload with their chemicals from the UK to their EU markets. This will no longer be the case as their EU market is now supplied directly from their subsidiary in Poland, where they import all of their chemicals. According to the CEO this meant that Aston Chemicals had to lay off a third of their UK-based staff, and will now have to pay more tax over in the EU.
Many believe industries, such as chemicals, pharmaceuticals, food and drink and manufacturing in integrated supply chains will be the most affected ones. Industry sentiment surveys show businesses in these industries are expecting long-term impacts of Brexit to be more significant than the expected chaos at borders and ports. They believe the new rules and regulations imposed by Brexit will force these businesses to change the way they trade.
How has your business been affected by the changes in trade regulations? Get in touch with us to see how we can help make things easier for you.