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Facing the brunt of Brexit

Factory – Clifton Food Range crop
Machinery used in Clifton Food Range’s factory based in Somerset.

The end of the Brexit transition period on 31 December 2020 means that all UK companies are now facing a major change in trading with EU countries. But in the catering equipment sector there are many prominent manufacturers based in the UK, so has this shift presented them with any additional opportunities?

At Weston-super-Mare-based Clifton Food Range, MD Melvin Dickson feels it is too early to tell, but he believes: “As trade deals become established with overseas markets we anticipate an expansion of our sales into these new areas. However, sales of our British-manufactured products continue to grow in export markets, based on the reliability and high quality that British manufactured products offer.”

In terms of costs, the sous vide equipment specialist has been fortunate that the EU-based component suppliers it works with have maintained price levels. Dickson detailed: “Where there may have been a potential for an increase we have now arranged to collect from manufacturers thus avoiding any extra administration costs. These in turn are offset when we export, as most of our distributors now collect from us and we no longer have the costs of arranging onward shipping to them.

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“We have decided to freeze our prices for 2021; it is our way to support our dealer channel the best we can throughout the year.”

At Stirling-headquartered Falcon Foodservice Equipment, MD Peter McAllister analysed: “What we are seeing at present is a significant tightening in global supply chains, this is a mixture of reduced capacities due to Covid, ramp up in volumes, global freight delays and the overall Covid impact on the global economy.

“Generally lead times are extending globally and demand profiles are volatile, resulting in short lead time requirements. This provides the perfect storm for importers but real opportunities for companies who can manufacture close to their customers. As a UK manufacturer we are able to be flexible and agile in adjusting manufacturing plans to react to our customers’ demands.”

He further reported: “Like most companies we have seen costs go up; this is a mix of freight, increasing commodity prices and suppliers looking to take advantage of the current situation. As a UK manufacturer we are able to react quickly to customer demand and supply chain price pressure.”

Elsewhere, Welbilt brand Merrychef, whose accelerated ovens are manufactured in Sheffield, noted that the Brexit transition changes implemented at ports, with IT systems, logistics and duties, have been traversed, managed and resolved by its experienced teams. According to Colin Lacey, vice president and MD: “We prepared for Brexit three times, at significant cost to the business, and yet we still had some ‘surprises’, but nothing that our very dedicated Welbilt team have not been able to deal with and resolve.”

Noting that the takeaway and delivery boom has delivered the second best quarter for Merrychef in its 70-year history, Lacey nevertheless acknowledged: “We have incurred extra costs such as double duty with regards to imports and exports with the EU. In addition to direct monetary costs, there have also been indirect costs, especially within our logistics administration to ensure our team are fully up to speed on all the new paperwork and legislation that we need to adhere to.”

Victor’s new premises in Keighley, West Yorkshire, has doubled its previous footprint.

Counter and display specialist, Victor Manufacturing, has recently moved its factory to Keighley, West Yorkshire, doubling the footprint of its previous Bradford base. Simultaneously, MD Phil Williams was preparing the company’s exit strategy, as UK sales and marketing director Steven McGarvie detailed: “He had the great foresight to use our strong supplier relationships to negotiate improved terms and secure additional held stock of raw materials and bought-out parts. This meant that we were able to mitigate the issue of increased cost of materials with no interruption to supply.

“We have tried to reduce some of the pain our customers have encountered, passing this saving on by holding our pricing throughout 2021.”

McGarvie further reported: “After speaking to our network of dealers we have found that both they and end users alike are finding it difficult and costly to source products from outside of the UK, post-Brexit. This has meant that we have seen an influx of enquiries for both standard and bespoke units since the turn of the year.”

However, other manufacturers have been rather damning of the Brexit impact. For instance, Roz Scourfield, national sales manager at Hoshizaki UK said: “The new Brexit terms have presented no new opportunities as yet. Instead we are faced with more administrative hurdles and barriers to business. Plus from April more stringent import controls come in and so the industry may face delays getting orders into the UK. I would advise customers to get orders in quickly to avoid disappointment.”

Hoshizaki UK’s national sales manager Roz Scourfield is concerned about Brexit-created administrative hurdles.

She added: “Since the end of the Brexit transition period our export business to the Republic of Ireland has faced significant additional costs, not to mention the extra time and costs incurred dealing with the required administration.”

Likewise, Precision Refrigeration MD Nick Williams commented: “So far, whether it be on a micro or macro level, I have yet to see anything positive come from Brexit. It’s got to be one of the biggest self-inflicted wounds an economy has ever imposed upon itself. Overall export/import costs are spiralling, and the bureaucracy has multiplied. Now, not only do we need to adhere to European regulations (that we no longer have any input in), but we also have a further set of new UK rules to abide by too.”

Additionally, he underlined: “Whilst the cost of goods has remained constant, the cost of shipping and ancillary import/export charges have ballooned. In January, and still now, it seems like truck companies are simply avoiding the UK as it’s too much hassle for them.

“To give a concrete example, we have a component supplier in Germany. Before Brexit, it cost us €120 to ship our monthly order to us in Thetford. In January, that cost went up to a staggering £800! This relates to a double-digit overall increase on the landed cost of these components.

“So far, we have absorbed these extra costs, but that can only go on for so long before we have to pass it on to our customers. In the meantime, we are grouping shipments and getting larger quantities delivered less often to try and mitigate the increased costs. All this whilst hoping that the situation will calm down in the near future.”

Over at thermometer manufacturer, Electronic Temperature Instruments, director Jason Webb evaluated: “The UK has always been an exporting powerhouse. But we can’t be under any illusions. Brexit, coupled with the pandemic, has presented a host of obstacles and problems. It is taking significantly more time to do things which means we have had to throw extra resources to address shipping issues that previously weren’t a problem.

“As an example, we had some products recently which went to Italy and sat in transit for 3 weeks before heading back to France and then back to Stansted. We hadn’t recalled these products, and at the other end we had a customer still expecting them to arrive. Instead, there was a miscommunication at the other end when it came to the paperwork. These were returned to us for extra product certificates which take time to produce, and time is money.”

Milton Keynes-based Mechline Developments, too, has experienced transportation issues, with marketing manager Kristian Roberts detailing: “From a logistics perspective we have seen increased costs owing to additional processes in place at borders, for example customs clearance charges and documentation requirements. These have been managed through negotiation with our supply partners overseas as well as logistics operators.

“In anticipation for Brexit we took responsible measures to preserve our product and service quality and were in contact with all suppliers regarding their plans to mitigate the potential impact of the Brexit deal.”

However, he was upbeat, saying: “Brexit and Covid-19 have forced clients and customers to look for more local, reliable, sources of supply, with a much-reduced complexity of supply chain. As a British manufacturer this has presented an opportunity to Mechline. We are proud to be manufacturing in Britain and to source a good deal of raw material from the UK. Not waiting on supplier chains from outside of the UK allows for timely deliveries, small or large orders, at a reasonable delivery cost.”

All Lincat appliances are built and assembled on-site at the manufacturer’s Lincoln factory.

Elsewhere, Lincat was very positive about opportunities presented by Brexit. Group marketing manager Helen Applewhite enthused: “We are hearing of overseas foodservice equipment manufacturers increasing their prices to cover import surcharges; this, coupled with freight and supply issues, means UK manufacturing and supply has never been so important. Results from a recent survey of our distribution partners and end users echo this. 69% of respondents said buying British is important to them. We can only see this figure growing as the repercussions of the Brexit terms play out.

“British manufacturing is at the heart of our ethos, which is why each of our products is built and assembled on-site at our dedicated facilities in Lincoln.”

Acknowledging that Brexit has impacted Lincat’s export business, both financially and with freight delays, Applewhite added: “Although we have had to pass on the customs charge on to our overseas distribution partners we are working with them to consolidate their orders to mitigate these costs.

“The introduction of customs paperwork has increased administration on all export orders by as much as 20%, however as a business we have taken the decision to absorb these costs rather than passing them on to our overseas distribution partners.”

Tags : best of britishBrexitclifton food rangeetiFalconhoshizakiLincatMechlinemerrychefPrecisionVictorwelbilt
Clare Nicholls

The author Clare Nicholls

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