Brexit Update

As we approach the end of the first quarter after Brexit it feels like the right time to update on our position, and to hopefully address any misconceptions on the security of the supply of European beers into the UK.

We have been able to negotiate the difficulties during this first quarter thanks to a Brexit stock build plan laid down by our purchasing team which accurately forecast demand and allowed stock cover for January. Prior to this, the longer term work of direct investment in the supply chain through our purchase of Rarter Bond, ensuring strong relationships with our haulier, clearing agent and suppliers has all helped avoid any immediate difficulty in shipping beer into the country. The result is that, at the time of writing (24th Feb 2021), we have a 90% stock availability across packed lines sourced from the EU - that’s 240 different beers from 44 unique breweries.

Thanks to maintaining a close relationship with our continental haulage partner, we’ve been able to keep beer flowing from Europe without any delays. Unlike most other products imported to the United Kingdom, beer is a controlled product and therefore required a full customs declaration from the 1st of January. It can be extremely difficult to find a carrier willing to make the journey over to the UK under this new process and is made worse by previously cabotage arrangements (allowing drivers to collect from three sites) ending with the new terms limiting collection sites to one location without a special permit. As a result, it’s become more difficult for haulage companies to consolidate shipments between Europe and the UK (in both directions) with inevitable inflexibilities and cost increases passed on to importers.

Ironically this is a historic EU rule added by the UK to protect British hauliers from being undercut by their EU counterparts; back when there was a large fuel price disparity EU hauliers arrived in the UK full of cheaper EU fuel, dropped their shipment then proceeded to do local UK ‘jobs’ undercutting their UK counterparts.

Thankfully, we work directly with almost all of our EU brewing partners and with sufficient shipping scale to ensure movements are full lorries from one place helping us avoid this issue. We are also aided by needing to move goods both ways (for now it’s empty crates and bottles but we hope for empty kegs again soon!) meaning that we are not impacted by the spiralling costs from one way consolidated shipments.

We have also avoided many of the setbacks and delays associated with the administration of clearing goods because our haulage partner has an in house customs clearance agent. We recognise this is a fortunate position as many other importers are experiencing difficulties securing the services of customs clearing agents due to a lack of capacity in the country. Despite this process being an integrated part of our haulage service it is an additional new step and the additional cost is forecast to be £100,000 per year for customs clearance declarations alone. Our ultimate aim to develop the Rarter Bond business (remember that long term investment we made in the supply chain?) to process the required UK customs declarations ourselves to reduce these costs but first we have to wait for HMRC’s delayed software update to link with our brand new IT systems.

We have also continued our specials sourcing programme and have been delighted to have added new continental suppliers within the first couple months of this year. There has, however, been a small disruption in our more bespoke offering whereby we can source a handful of cases of a specific beer on the request of an individual customer. There is currently a cost for clearing each unique beer of around £10 per product. For a large order of a full pallet of a unique beer that’s a manageable cost to bear, but obviously in smaller quantities it can quickly become cost prohibitive. Sourcing these rare one offs is as much of a pleasure for us as it is for the customer and is something that we’re doing our level best to be able to maintain.

The relationships with our partner brewers on the continent has been absolutely essential to managing this process. We’re deeply grateful for all of the support they’ve given us, whether that’s in the professional capacity assisting with paperwork and clearances, or in the personal sphere giving friendly advice and listening to us. Many of these partners have plenty of experience in shipping across the entire globe and are used to navigating complex systems to do so; their support has been brilliant. Overwhelmingly our partners are committed to continue sharing their world leading beers to the UK market and have no interest in extinguishing our country’s deep passion for classic European style beers.

Some commentators have suggested that UK based breweries will simply step in to fill the gap left by European beer. We count many of the UK brewers making continental beer among our friends and deeply respect their beers. But we are confident that they would be the first to agree that wide availability of world leading brewing serves as a positive source of inspiration and not a competitive threat to be snuffed out. Import brands play as much a part in pushing British brewers to develop and innovate as British brewers do for our European counterparts. We’re aware of our position within the wider UK brewing community and the symbiotic nature of that relationship. Without a strong domestic brewing scene there would be no passion for exceptional beer. Without a strong presence of imported beer, it’s difficult to find inspiration and enthusiasm to make exceptional beer.

Supply to Northern Ireland has been one of our greatest Brexit challenges to date. We have many long standing relationships with distributors and retailers in Northern Ireland that have been affected by a Brexit deal that has effectively created a customs border down the Irish Sea. Initially this made it impossible to ship to them in an efficient way, where it had previously been an entirely seamless process. This being said, we have made several successful deliveries albeit with a slightly longer lead time and, you guessed it, lots more paperwork. It seems to be clear that both the UK government and the European Union agree that the Northern Ireland protocol needs refinement, and we hope to see some progress in this area very soon.

If you’re currently open and trading we look forward to our next delivery to you; if you’re currently closed, waiting for the hospitality to re-open, we’re excited to pick up where we left off together. We’ve been doing this for four decades now, and intend to carry on for many more.