With businesses in several sectors reporting concern over the effect of Brexit on supply chains, Co-op News spoke to Dan Monks, a veg buyer at Manchester’s Unicorn Grocery Co-op, to see how the organisation has been impacted.
How much time did the preparation for Brexit take last year? What did it cost and did you have any assistance from the government with this?
We started preparing years ago, but it built momentum in 2020. We trained two members of staff in the HMRC customs declarations qualification level three and bought supporting software to be able to submit customs declarations in house. We got grant support to cover the cost of this.
We planned ahead with any orders we could stockpile – branded household goods (we buy direct from companies like Sonnett in Germany), long shelf-life products and commodities – and placed these in external storage. Although the storage is costly, we saw this as advantageous to the costs of import once we left the EU and also to minimise gaps in our range.
The one thing we couldn’t stockpile is veg. In January, we immediately started importing this from France, Italy, Spain and Europe. Costs occur per consignment that we purchase. Because of the size of our business and the face we are committed to freshness of produce, one consignment generally applies to a single pallet of goods. We differ massively from larger supermarkets in this respect for whom a consignment can be an entire container’s worth of goods. We pay import and export fees per consignment and are limited to the number of lines we can have in one order before further costs are added.
In April there will be another cost of phytosanitary certificates to include. Phyto certificates will be needed for each single commodity we buy.
What extra procedures does Unicorn have to go through after Brexit?
This depends on the terms under which we are buying the goods. If we do the declarations in house, we have to input information for each commodity bought. A lot of our suppliers are choosing DAP (delivery at place) or DDP (delivery duty paid), though, which means we don’t have to complete the customs – but we are liable for the costs I’ve outlined above.
Generally speaking we now have to buy in larger quantities (to justify the extra cost) and have our orders prepared further in advance. This has an impact on freshness again, as we cannot respond to demand as easily.
Is there a ballpark figure on the time and cost of the new procedures?
We have a ballpark figure of £150k for the additional cost of declarations, based roughly on what we buy in a typical year. Time spent is harder to calculate but it has added extra procedures and checks to each stage of the ordering process and we invested time in the training too last year.
Are any supplies affected or is everything getting through OK?
We usually experience the odd delay of goods crossing the Channel – these have not been more pronounced since we left the EU. One thing I would highlight with regards to this is certain specialist products that we don’t sell enough volume of to justify buying any longer. Interesting things such as horseradish root, bergamot lemons, radicchio and fresh artichokes are far more difficult to get hold of. We have to be careful with the balance of this as Unicorn specialises in the rarer and more unusual veg so sometimes we have taken the hit to be able to reinforce our range.
Do you expect things to get better?
Hmmm. In the short term, absolutely not. In fact, they’re going to get harder in April and again in June as the final two stages of border controls and checks are introduced (April, phytosanitary; June, physical checks).
One positive to highlight is how less dependent we are on European stock during the summer and autumn months so we will feel less exposed to the costs. We are currently importing around 80% of our fresh range. There’s also question marks over the status of organic produce (we buy 100% certified organic fresh goods) and this may incur an extra cost, too.
In the longer term I find myself more hopeful. Wishful thinking perhaps but I imagine innovative solutions will be offered for small to medium-sized businesses such as ours, to club together and share the costs of importing.
Are there any upsides?
For us a business, none. We are paying more for the same goods we were buying in December. We have less purchasing power and our margins will suffer too.
However, at Unicorn we want people to engage in where their food is coming from, and appreciate the difficulty of growing affordable food which pays a fair price to the person growing it while having minimal impact on the environment. If leaving the EU can spark a greater interest in food sovereignty and an appreciation of a food system that values each aspect of the supply chain (rather than the myopic, unsustainable focus on the lowering of prices) then I see great optimism for the years to come!
We hope there will be a renewed interest in agriculture and growing in the UK, creating more direct supply chains, fewer food miles and a more participatory, joyful food system.