Brexit has now officially happened, but the uncertainty surrounding a future trade relationship with the EU is still ongoing – at least until the end of this year when the negotiations are due to be completed, despite the current coronavirus crisis.
This could be particularly pertinent for professional warewashing brands, as so many of them are imported from the continent. Therefore we delved into how these manufacturers are currently managing the situation.
For instance, at Italian-headquartered Krupps, it doesn’t know whether it will have to pay tariffs or surcharges for import once the negotiation deadline has passed. However, export MD, Riccardo Scuotto, said of the company’s strategy: “No drastic changes are planned for now. We supply our product worldwide and we are ready for any type of scenario.”
However, he did indicate that the firm may increase its stockholding in the UK in order to guarantee as wide a product range as possible is available for all customers. Scuotto concluded: “We may take Brexit as an opportunity for increased investment in the UK territory in order to improve our service and sales.”
At Sweden-based Wexiödisk, UK and Ireland country manager David Glover was cautious as to how the manufacturer will approach future trade: “Whilst it is official that the UK has left the EU, official government rules and regulations are yet to be confirmed, hence why it is difficult for manufacturers to say exactly how the Brexit process will affect the warewashing manufacturing industry,” he said.
Nevertheless, he did state: “What Wexiödisk can confirm, however, is that no matter the change in regulations, we will continue to pay close attention to the Brexit process so that our UK dealers and operators are still able to easily access our products.”
On the subject of stocking, Glover analysed: “Importing is bound to change now that the UK has left the EU; exactly how it will change, and when it will change, however, is still unclear at this stage.
“To prepare for these impending changes, Wexiödisk will continue to regularly review delivery lead times in order to ensure sufficient stock is available to UK dealers.”
Reviewing the overall current situation, he said: “As our network of UK dealers already know, quality and customer satisfaction is a given when investing in a Wexiödisk warewasher.
“It is for this very reason that we feel confident that Brexit will not negatively affect our position in the UK market and we will continue to push the high-quality message of our Swedish brand.”
For Germany’s Winterhalter, the true impact of Brexit is incredibly hard to quantify. Paul Crowley, marketing development manager of Winterhalter UK, questioned: “Will it have a big effect on the costs or the availability of warewashers and or the spare parts needed to fix any faults? No-one can really answer that.”
However, he did explain: “Winterhalter is waiting until all the relevant facts, both from the UK government and the EU, have been published. Until those details have been released, it is impossible to speculate or comment on anything relating to Brexit or the effect of this on future trading in the UK.
“Once there is a better understanding of future trading agreements, Winterhalter can comment on its trading position. The aim is to release a considered statement to the press and to customers and dealers once we know what’s what.”
Crowley further confirmed: “Despite the uncertainty of Brexit, what is certain is that Winterhalter is, and will continue to be, in a great position to deliver whatever the Brexit situation demands. Customers and dealers should be reassured of our commitment to providing the best products and services.”
At sister brand Classeq, it feels it is in prime position with a base in Stafford. According to marketing manager Adam Lenton: “At the moment, as the negotiations and rhetoric continue around the whole question of EU trade deals, the impact of Brexit on importing and exporting goods remains an unknown quantity.
“However, our Classeq brand is produced out of our factory in Staffordshire as finished goods for supply, so we do not envisage a significant impact on the brand, or on the service we offer our customers. Ultimately, we see being British-based as an advantage that ensures consistency of availability and delivery.”
With the UK government indicating that it wants to diverge from EU rules and regulations, Lenton was keen to emphasise: “Classeq machines are exported from the UK throughout Europe and around the world, therefore we will continue to manufacture these machines to the same standards and regulations as they always have been.”
In terms of any warewasher stockholding volumes and location impact, he detailed: “With the uncertainty, around Brexit for the past couple of years, we have already been ensuring fluidity of supply and making sure that we have stocks that can be accessed swiftly – so for us, it’s business as usual.
“In the long term, our business is growing fast and our premises have been designed to ensure we remain ‘fit for the future’. Our factory comprises of 2,700 metres2 and is sizeable in terms of warehousing space, and it has the ability to facilitate the long-term growth through further expansion that Classeq is driving.”
Further elucidating the benefits of the company’s premises, Lenton continued: “Our investment programme is continuous into the Classeq brand and never more so than in 2017 when we opened our new manufacturing facility in Stafford.
“This facility, was carefully chosen at the time for its central UK location, as it is ideally situated for deliveries, spare parts and servicing across the entire UK.”
Looking ahead, he concluded: “Our investment programme will continue undaunted (and unaffected by the Brexit process), to support our growth plans for Classeq over the next few years. The brand remains in growth as customers turn to value and reliability and we have an exciting programme of product development and service excellence that will solidify and build on our position further.”
FEA coordinates with other industries on post-Brexit trade
The UK’s membership of the EU ceased on 31 January and there is now a transition period until the end of this year, over which time the majority of existing trade arrangements will remain. From 1 January 2021 the UK’s relationship with the 27 members of the EU will be defined by any free trade arrangements (FTA) agreed between the UK and the EU during 2020.
During this time, industry association FEA (formerly CESA) is helping the trade body umbrella group EURIS to assist the UK government in the development of any FTA, in particular covering specific goods related clauses.
Regarding the development of a goods-only FTA, EURIS has drawn out the key clauses on goods from the political agreement that it believes should be a central part of a future FTA. Whilst EURIS does not cover the entire UK manufacturing sector, it feels it represents a sufficiently wide spectrum of industries to ensure that it can be the voice of wider sectors. A close relationship with the BSI may also be key to delivering workable outcomes.
An FTA encompassing services or even consumer goods may need ratification by each EU member state and constituent territory as having a shared competency. The trade group believes that an FTA for industrial goods should be within EU competence and so would not require further ratifications, and that this should give a goods-only approach more chance of early success.
To further assist in the success of an FTA for industrial goods, EURIS is able to compare UK industry’s position with EU industry through Europe technology industry representative, Orgalim, in order to highlight areas of agreement between UK and EU industry which can be presented to the UK government and EU Commission, as part of a full or partial FTA negotiation between the UK and the EU.
This plan is restricted to the FTA clauses that are core to the industrial goods sector. These include: rules of origin for goods; product compliance testing, certification and marking; product regulation; standards; import and export tariffs; plus any other clauses deemed to be appropriate. There is also great interest by the EURIS industries in other parts of FTAs including free movement of people, services etc.
There is an ambition from the UK government to develop a set of technical and legal agreements with the EU as soon as is practicable. A primary ambition would be to include the position for trade agreements of ‘one standard, one test, accepted everywhere’.
The UK has left the EU from a starting point of full alignment on product regulation, technical standards and mutual recognition of testing and certification. The appropriate cooperation mechanisms envisaged by the Political Declaration agreed by the UK Government and the EU can be put in place to ensure mutual market access, believes EURIS. This could then be developed alongside the leading role played by UK businesses and trade bodies in international standardisation for both the UK and EU to promote this principle in other FTA negotiations.