Some of the UK’s biggest drinks companies are now joining supermarkets and food distributors in warning of empty shelves this Christmas. Nick Mosley asks Sussex food and drink businesses where the problems lay. [This story first appeared in The Argus on 30 November 2021]
The Wine and Spirit Trade Association has released a joint statement to warn UK Transport Secretary Grant Shapps that the country will run short of wines and spirits in December due to a lack of HGV drivers. The letter was signed by 48 members including major players Moët Hennessy, Pernod Ricard, the Wine Society and wholesaler Matthew Clark, urging the government to extend the temporary visa programme allowing EU goods vehicle drivers to fill the shortfall in drivers bringing product from the continent and distributing across the UK. The letter stated that imports were taking five times longer than this time last year.
The pandemic has created immense problems for global supply chains, from building materials to children’s toys. Consumer and industrial goods production stalled in China with global shipping networks disrupted, resulting in tens of thousands of shipping containers laying empty in major ports around the world. Equally, the movement of food and drink has faced unprecedented challenges seeing rising prices for both businesses and consumers.
There is no doubt that Covid has been a major factor in the disruption, however food and drink businesses of all shapes and sizes in Sussex are expressing that their biggest frustration is the ongoing outfall of Brexit.
With the UK’s Office for Budget Responsibility recently forecasting that the pandemic would reduce the country’s GDP by 2%, chairperson Richard Hughes also stated that the cumulative negative impact of Brexit would further reduce Britain’s GDP by 4% in the long term. Many businesses who import to and export from the UK are now not only beginning to see the financial and operational impacts of Brexit but are also becoming more vocal in their concerns and criticism of the UK’s departure from the European Union and it’s Single Market.
Henry Butler of Butlers Wine Cellar in Brighton has spent his career in the wine trade and is the longest trading vintner in Sussex. Henry says the burden of new paperwork caused by the new customs regulations at the UK-EU border – which are only due to become more complex in 2022 – are an undesirable frustration for him and will ultimately become a cost-burden for customers at businesses such as his.
“We have a new norm which is Brexit led, not Covid”, said Henry. “A pallet of Champagne used to cost about £165 to ship from France but this year it cost £265. The only difference was a line at the bottom of the invoice saying ‘Brexit admin fee'. From door to door, via our bonded account, it would normally take two weeks. This pallet took two months, so we had to pay for the shipment before we could sell a single bottle”.
Butlers Wine Cellar not only import wine but also export to Europe.
“The rules continue to change”, said Henry. “We recently shipped wine to a Portuguese customer. I spent two days working with the shipper to make sure the paperwork was correct and – even then – I was not confident it would make it through. We still had to tweak the paperwork when the package arrived in Portugal, otherwise the wine would have been confiscated. It used to take about an hour to do the administration. We tend not to push for sales to Europe now”.
“I'm trying not to be negative. We can't sit still, we have to get on with it, but nobody is putting their hand up to say where the positive is here”.
In the past decade, Brighton Gin has become one of Sussex’s most iconic brands and relies on effective supply chains for the production and sales of their gin.
“We had to cease direct to consumer sales from the UK to the EU due to new customs laws and the knowledge and cost that is needed for those”, said Charly Thieme, Brighton Gin’s operations director. “We felt we couldn’t expect consumers to have to pay for these increased costs. We've been very lucky to find importers into some EU countries who are dealing with issues for us and are now making our gins available to EU markets again but, of course, that is having an impact on our margins”.
Brighton-based Phil Bartley is owner of Great British Charcuterie who supply local cheeses, cured meats and wines directly to consumers and wholesale to businesses across the UK and Europe.
“We are actually just coming off the back of a disastrously painful corporate order to various countries across the EU”, said Phil. “Our client ordered 600 small gift boxes which we shipped. Each one had to be individually sent with relevant customs information. We then ended up with so many issues with customs and VAT payments that we effectively had to cancel the order at a huge loss to ourselves”.
“We have since decided that we shall not be exporting anything and are going as far as declining to send any shipments that would have to cross waters. This will impact our business hugely but the red tape has made the experience one that we shall not be repeating”.
With food and drink production, hospitality, tourism and travel such fundamental sectors within the Sussex economy, the departure of EU citizens back to the security of their home countries due to the pandemic has been a blow for employers. Unfortunately, the government remains reluctant to revise its post-EU points-based immigration system to allow – and actively encourage – workers from the EU to return to fill roles that remain open.
The poultry industry is already warning of a lack of seasonal workers from the EU to process turkeys for the Christmas table, despite government adding 5,500 temporary worker visas. The UK’s Meat Processors Association estimates there is currently a 43% shortage in abattoir workers to humanely process and prepare meats such as pork and chicken for domestic consumption.
“If our industry is going to survive then we also need to look at our domestic workforce and the reluctance of the younger generation to work”, said Phil of Great British Charcuterie, who also is partner in numerous hospitality businesses in Brighton and London.
“We are surviving for now but as an employer, with an average staff age of around 35, I am becoming increasingly worried about the future and the lack of younger staff able or willing to join our profession, this is especially prevalent with chefs”.
Much has been reported in recent months about the lack of HGV lorry drivers in the UK. Although this is also an issue in Europe, the fundamental problem appears to be that distribution has turned into a one way street which limits the profitability of transport companies and the willingness of lorry drivers to bring products to the UK as the likelihood is they will be returning to the EU with empty trucks due to bureaucracy – and associated costs – at the border of the EU, now the UK is no longer in the Single Market.
From day one, the fishing industry has been at the fore of the Brexit debate with the reclaiming of UK territorial waters as key tenet of the sovereignty debate. Departure from the EU hasn’t delivered in practice for fishermen.
“Brexit has had a detrimental impact on the fishing industry”, said Kier Foster of Brighton and Newhaven Fish Sales. “Exporting fish has become extremely difficult due to the amount of paperwork involved, recruitment is much tougher as foreign workers make up a large percentage of staff for fishing boats, processors and fish wholesaler like us”.
“I hope these issues will be resolved in the coming months by simplifying paperwork and allowing foreign workers access to lower skilled jobs, but only time will tell”.
The UK government continues to champion the signing of new trade deals around the globe, yet the reality is that these will go in no-way to matching the previous trade that was shared with the EU. By the government’s own projections, the recent trade deal announced with New Zealand is likely to have a negative impact on the balance of trade between the two countries. Whilst the UK consumer may benefit from cheaper, frozen New Zealand lamb produced at a lower level of veterinary standards and having a significant environmental impact from being shipped 11,500 miles, UK sheep farmers – who already work with small margins – are understandably up in arms that their family businesses are being undercut whilst their own major export market to Europe has been cut off.
“The National Farmers Union is calling for a commitment from Government to ensure that Britain’s food production doesn’t slip below its current level of 60% self-sufficiency”, said a NFU spokesperson. "Government has a statutory duty to report on food security under the Agriculture Act”.
Although Brexit has fallen off the daily news agenda, some are claiming that central government are using Covid as a smokescreen to disguise the negative disruption that Brexit is causing to trade.
“What worries me most is even though a bad deal has been implemented, the most difficult parts have been delayed, once again kicking the can down the road”, said Peter Kyle MP for Hove and Portslade.
“There are still no checks on goods entering Britain. Full customs declarations aren't yet needed”.
“Our whole country is dependent on complex supply chains and fundamental services like food and fuel depend on them. Brighton and Hove's economy is uniquely vulnerable to Brexit challenges and an improved deal and relationship with the EU is essential”.