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Brexit crumbs of comfort

Not many independent health food retailers sell abroad through a website but those that do have encountered a minefield of regulations, tariffs and delivery charges following Brexit.

Smart retailers with a swish website and overseas customers worked on the problem throughout 2020. We spoke to one health food retailer who knew what was coming and was in fact ahead of all the delivery companies – in this case Yodel, ParcelForce, Royal Mail and DHL.

They knew that whether or not a deal was struck, every item going overseas would be on the same terms as ‘Rest of World’. Every product would need a tariff code, some crossing categories and all with different duty levels.

It took them all year to get Brexit-ready – and only for a tiny proportion of their sales.

Their system had to know the product prices ex-VAT because this varies, add in duty charges (customs export and import fees) and calculate everything. Or not add these charges, and let the courier do it, claiming from the end customer. Not a good way to do business!

Many have been caught out, and all have been faced with the black hole of red tape and agonising customer complaints.

Then there’s Northern Ireland. Work that one out if you can.

Another retailer, online sustainable supermarket Approved Food, told us that export documentation requirements introduced after Brexit had already forced the company to stop taking orders from customers based outside the UK.

Under the latest regulations, paperwork must include individual product commodity or harmonisation codes, weights and country of origin details for every item in a parcel – with most Approved Food orders containing dozens of items.

An additional issue is that most third-party couriers will not allow parcels containing liquids – including drinks, shampoo and perfume – as they are concerned about spillages. By not allowing commodity codes for such products to be entered into the system, Approved Food found it was virtually impossible to service international customers.

But help is available.

Jacob Thundil, founder and director of Cocofina, started planning for the UK/EU transition way back in early 2020. This, he says helped him to adapt to keep his business moving and be ready for new opportunities. He is now encouraging other organic food businesses, if they haven’t done so already, to access the support available.

His Ickenham, Middlesex business produces organic coconut-based products, which he sells to 28 countries, making exporting and importing a critical part of his business. Jacob explains: “About 45% of my sales come from exports, so I had to take action early to mitigate any risk to the business. I also had to be flexible to hold on to the long-term relationships I have established with my customers and suppliers in Europe.”

“We used Gov.UK to understand the process for imports and exports to the EU,” he says. “Many of our products are manufactured in the UK and are therefore classified as having preferential origin. Under the terms of the deal this means they will not be taxed.

“We also got the right information about labelling changes for exporting organic food, and to understand the impact this process has on our trademarks and patents.

“Our products are long-life perishable, so it is more straightforward for our business and the few delays we are experiencing now can be mitigated. However, I do anticipate any supply chain disruption will ease, costs will come down and many businesses will be in a better position.”

If you are experiencing problems, here are Jacob’s recommended resources:

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