What to do if your EU suppliers are no longer selling to the UK post-Brexit
It has been just two weeks since the UK transitioned away from the EU. Despite a last-minute trade agreement between leaders, there have still been some settling issues as businesses on both sides adapt to the changed relationship.
One of the most prominent areas of change has been how UK and EU companies trade with one another. While the trade agreement reduces the impact of tariffs, there remains increased red-tape around the trading process compared to that under the single market. This includes border checks, duties, customs declarations and other documentation requirements.
This new protocol has amounted to increased bureaucracy, effort and cost for many businesses. While some firms have warned of delays due to these factors, some have taken a step further and halted sales to the UK.
While some supply chain disruption was expected, particularly in the early stages of Brexit, companies who find themselves losing their EU suppliers will have the unwelcome challenge of plugging the gap and minimising the impact on their operations.
We have detailed the options you should consider if you find yourself in this position, so you can attempt to rebuild your supply chain and ensure you get the materials you need to enable your business to operate efficiently.
- Communicate with your supply chain
- Search for alternative EU suppliers
- Utilise new trade opportunity
- Seek domestic suppliers
- Focus on the long-term
Communicate with your supply chain
The first step to minimising supply chain disruption is keeping the lines of communication open. If you have contracts in place with a supplier, they should contact you to let you know of any issues with their service and put arrangements in accordingly.
If you are not contracted with a supplier, but regularly buy from them, it is worth checking their website or getting in touch to find out if anything has changed.
Talking with your suppliers will uncover if they are continuing to ship to the UK for the foreseeable future and whether anything else about the service they provide is being changed. This includes delays in delivery and price increases. By discussing these issues, you can gain insight into how your operations may be affected and make appropriate contingencies where required.
Search for alternative EU suppliers
While the relationship between the UK and the EU has changed, the agreement of a trade deal has widened the opportunity for the two areas to continue importing and exporting with each other. Although some firms may be reducing or completely stopping their UK exports, some EU suppliers will continue to provide to the UK.
It is therefore worth shopping around to find out what other deals may be available to you. This is particularly apt if you are tied into EU suppliers, depending on the products you utilise.
Do bear in mind that even EU firms who are continuing to sell to the UK will need to deal with the introduced red-tape and taxes around exports, which may have caused them to extend their delivery timeframes or increase prices. So, even if you find a new partner to work with, their service and prices may differ from those you experienced with a previous supplier before the EU transition period ended.
Utilise new trade opportunity
Since the decision to leave the European Union, the UK government has been working on numerous trade deals with other countries to fill the void left by leaving the EU. Alongside the EU, the UK now has trade deals with Japan, Australia, Iceland, Norway, Turkey and many more.
The advantage of having these trade deals in place is that it opens up opportunities for businesses both in exporting and importing goods.
Remember to be take note of any tariffs, duties, associated paperwork or with the trade deal, so you are aware of any additional costs that may need to be accounted for.
Seek domestic suppliers
Another option when looking to fill the gap left by an EU supplier is to utilise local British suppliers. The benefit of doing so is that you won’t have to deal with the paperwork associated with imports, with no need for customs declarations.
Following the COVID-19 pandemic in 2020, shopping local has become an increasing focus for consumers, so utilising domestic supply chains and emphasising ‘made in the UK’ could also be a positive marketing point for your company.
The downside to using domestic suppliers is that certain goods are less readily available in the UK than abroad or aren’t available at as high a quality (such as certain foods). So, depending on the materials you need in your operations, this may not be an appropriate option for you.
Of course, it is possible to utilise different suppliers at any one time for your business: whether it be using domestic companies for one thing and overseas for another. The key is finding the best deal for your business, offering you the quality you need, at a competitive price and in a way that allows your operations to run efficiently.
Focus on the long-term
If you have had a supplier pull out on you unexpectedly, your natural first reaction may be to find another as quickly as possible. However, it is essential to focus on the long-term for your business too.
The likelihood is that many suppliers may be dealing with delays and disruption now as they adjust to the post-Brexit changes. However, as time passes, it is hoped that imports and exports will move smoothly. So, it may not be sensible to switch suppliers now if the one you are already established with is having some teething issues.
If your supplier has stopped selling to the UK or the issues don’t seem to ease, you will need to switch over to someone new. Be sure to do this in full consideration of your operations, cost implications, and any other aspects that may impact your company’s ongoing running.
If you do have an urgent need for a good and have to quickly find a supplier, try to come back to it later down the line and spend more time shopping around. This will also allow you to make sure you have the best deal with the possibilities available.
If you are experiencing issues within your business following the end of the EU transition period – whether it be your supply chain or otherwise – it is wise to seek help now on how to overcome the challenges and minimise the effect.
We offer a range of support for UK businesses to help them understand the changes now in place and how to mitigate any potential ramifications. Our one-to-one sessions, delivered by an expert advisor, provide tailored guidance to the unique obstacles you are facing, so you can move forward in the right way.