Drifting Apart? European Firms Battle to Reach UK Clients
Post-Brexit trade rules mean prosecco supplier Serena Wines 1881 must store bottles destined for Britain on costlier, fumigated pallets in their own corner of its warehouse in the northeast Italian town of Conegliano.
The new shipment requirement is one example of the extra cost and complexity that firms across continental Europe face serving British customers since Jan. 1, adding to disruption of the COVID-19 pandemic to drive UK-EU trade volumes lower.
“These first months have been hectic, hellish for everyone,” said export manager Nicola Piovesana. “Delivery times are now longer, now it takes 2 weeks to get to the (UK) client, while before it took one week at the most.”
The Dec. 24 deal reached between Britain and the EU after years of wrangling over post-Brexit trade terms at least meant goods trade – roughly half the total $900 billion of annual EU-UK commerce – was spared from tariffs and quotas.
But January trade volumes crashed as difficulties with the new rules combined with a hit from pandemic restrictions and substantial stockpiling by firms on both sides of the English channel in late-2020 in anticipation of trouble.
UK data released on Tuesday showed only a partial recovery in February, with British goods exports to the EU 12.5% below year-ago levels and imports 11.5% down. Data from Italy, France and Germany – Britain’s biggest EU trading partner – have all shown falls in the volume of UK trade in February.
With Britain its second largest export market after Germany, Serena Wines has bent over backwards to secure business with UK hotels, restaurants and caterers by revamping internal customs processes and dedicating one staff member to Britain alone.
But the pallet issue is typical of the type of knock-on impacts that companies are now having to deal with: in this case, trade with any non-EU country means international rules on anti-pest treatment of wood packaging apply.
Piovesana says the fumigated pallets cost about 9.50 euros (8.23 sterling) each, almost 20% more than the regular ones. UK guidance is for firms to consider switching from wooden to plastic pallets.
“Easier to ship to Asia”
High Quality Foods, a Rome-based food supplier to high-end outlets from artisanal bakers to West End eateries, struggles most with documentation on specialty meat products like beef from Black Angus cattle crossed with an Italian breed.
“There seems to be a trap in every corner,” lamented managing director Simone Cozzi, adding the company’s hygiene officer – a trained veterinarian – now needed to spend extra time with them when filling in the necessary paperwork.
Cozzi said delays at customs points had also added to transport costs because drivers want more money to compensate for wasted time, while air shipments can be held in a UK airport for 24-plus hours compared to only 30-45 minutes in Hong Kong.
“At the moment it is actually easier to ship things to Asia,” he said.
Italian farmers association Coldiretti cites such hurdles as endangering 3.4 billion euros of Italian agri-food exports, pointing to a 38% drop in exports of foodstuffs to the UK in January and almost 14% in February.
maritime professional
