Catering Insight talks to the UK catering equipment industry associations on the subject of Brexit preparations to see what their key advice is for the sector.
Distributors will need to see what’s coming down the line in the catering equipment supply chain when the Brexit transition period ends on 1 January 2021. Their trade body, CEDA, has been keeping a close eye on the situation, but at the time of writing, it is still undecided as to what the UK’s trading terms with the EU will be.
CEDA director general Adam Mason analysed: “Attempting to second guess any political negotiation at this moment in time would be folly. Both parties, I hope, understand the gravity of the outcomes of their discussions on all sides and we very much hope that agreements reached will minimise friction and protect jobs, businesses and the economy.”
The trade body has been liaising with the UK government over Brexit, responding to various consultations from a number of government departments directly relating to the catering equipment sector. It has also been involved in meetings with Build UK as to the impact on the construction sector and its supply chain. Mason confirmed: “We have sought assurances that future arrangements do not involve any increase in cost or administrative burden to member companies and the wider industry – specifically tariffs and red tape.”
So given a best estimate of the new trading terms, how are these likely to affect distributors and kitchen design houses? “In the main, our members are purchasing from a UK company and so the emphasis is on the manufacturer or supplier,” said Mason. “Costs are usually passed on in a supply chain, and for the unprepared supplier and manufacturer this could mean their products may become uncompetitive or unattractive. Work should be undertaken by distributors and design houses to seek alternative suppliers and manufacturers for their product ranges if their current supply chains are unable to provide the comfort factor that they require.”
He further advised distributors: “Communicate with your supply chain to ensure that they are suitably prepared for the various potential ramifications, specifically relating to stock currently in the UK and the logistics and costs of future equipment. Don’t just settle for ‘we’ve got it under control’, ask to see their systems, processes and policies and if you need to potentially seek alternative partners then do so.”
On the paperwork side of things, Mason feels: “Any extra bureaucracy is likely to be streamlined so there is no reason to believe this will become overly cumbersome.”
There is the option for distributors to invest in further appliance stock ahead of the transition, but Mason is sceptical that many would choose this path. “Now, more than ever, cashflow is of utmost importance to members who are already fighting to protect their employees and their businesses as a result of the pandemic. I would suggest very few, if any, will be looking to tie up more cash than they have to in stock and this, again, is where communication with their supply chain and potential supply chain is vitally important.”
And his final key piece of Brexit preparation advice? “Keep as up to date as possible and communicate. We have every confidence that our members and supply partners alike will adapt and thrive, no matter the outcome of the negotiations.”
The FEA has been integral to keeping the catering equipment supply chain at the forefront of UK Brexit negotiators’ minds, fighting to represent the industry throughout the whole process. FEA chief executive Keith Warren reported that the trade body has advised the government to: “Keep negotiating, avoid a no deal Brexit, and ensure that the deal signed avoids tariffs, simplifies rules and minimises red tape.”
But with the post-Brexit trading terms still not finalised, what does Warren think is in store for manufacturers and suppliers? “The key questions are tariffs and how simple it will be to move goods – neither of which has been finalised as yet. There are also areas such as declarations, conformity of goods, and so forth.”
He detailed that these topics will include all goods going to the EU needing to conform to and carry the CE mark, while those on the GB market will need to confirm to and carry the UKCA mark. “There is a transition period, but manufacturers may require separate EU and UK certificates from January 1 2021,” said Warren.
Also at the end of the transition period, all GB-based distributors of EU goods will become importers, and vice versa. The importer may also need to indicate their name and address on the product or documentation, keep a copy of the declaration of conformity, and ensure the technical documentation can be made available on request.
Warren further underlined that traders will have to make full customs declarations (or use simplified procedures if they are authorised to do so) at the point of importation on all goods and pay relevant tariffs. Those exporting to the EU will need to submit export declarations for all goods.
“Until terms are finalised, there’s no way of knowing how they will impact,” said Warren. “For what it’s worth, the government is trying to allay business fears by saying it is seeking to ensure a soft landing, meaning minimal disruption to the movement of goods.”
His immediate advice to UK catering equipment suppliers in order to prepare is: “Look at the toolkits that have been provided by government – bear in mind that we will be a third country in terms of trading with the EU.”
And how can suppliers best manage any extra bureaucracy that may be required? According to Warren: “By careful planning, good management and an ethos of adaptability. Talk to your shippers to make sure they have everything in place. If you are the prime importer, make sure you are fully aware of all the paperwork and processes you’ll need, and that they are in line with the latest government and EU information.”
Each time there has been a Brexit negotiation deadline, many manufacturers have responded by stockpiling their appliances in case of logistical disruptions. In this instance, Warren analysed: “Because of the uncertainty over what will come into force, and the potential for disruption at borders, many companies are doing the responsible thing and making sure they have enough stock to maintain continuity of product supply through the first few weeks after January 1 2021. The impact on cashflow will vary from business to business.”
Warren was reluctant to make a value judgement on what the impact will be to the industry next year, saying: “Until we know what the terms are, we can’t say how positive or negative they are. The one certain positive will be that the uncertainty will be over – then it will be up to businesses to adapt to the new terms. The boards who run our industry’s businesses will need to be able to make quick and decisive decisions to continue to meet the needs of the market.
“One encouraging area is that, as things stand, as far as regulations and standards are concerned, there is and will continue to be complete alignment with EU directives. So on that score, it’s business as usual.”
He concluded with his essential recommendations to UK catering equipment suppliers: “Sit down with a strong cup of coffee and go through the advice that’s been given and, if there are any gaps in your plans, take action to fill them. Don’t leave it any longer to act. If you have any questions you can talk to the FEA – we are in contact with relevant government departments and have knowledge of, and access to, the latest guidance and advice.”