Published on March 4, 2019 | by Alastair Gilmour0
Brexit, beer and sideboards
At the time of writing, nobody seems to know what the outcome of ‘meaningful votes’ and late-night discussions will mean to the country. It’s a real worry.
The future of Brexit Britain isn’t looking too rosy for the UK’s brewers, pubs and beer drinkers. The British Retail Consortium says increased tariffs and new regulatory checks in the event of a no-deal Brexit increases the cost of sourcing everyday food items by up to 45%.
Imported hops will become more expensive, as will barley from abroad (although in fairness we don’t use an awful lot of that) which will attract a tariff of 60%, much the same as bananas will.
New import taxes, or tariffs, will apply to a full range of imported foodstuffs – estimated at 5,200 products – ranging from cheese to beef and clothing – should the UK crash out without a deal.
The situation is difficult to predict because of other factors such as currency movements and commodity market shifts.
And it’s not just foodstuffs. Furniture designer Nick James of James Design, Newcastle, is stocking up on French oak before it’s too late and the UK crashes out of the EU.
He said in a Tweet: “This sorry state of affairs means I’m stockpiling my favourite wood to ensure I have enough to keep us going through the coming months – plus I can still make lovely sideboards.”
Our brewers are also utterly confused and are waiting from day to day to hopefully discover some clarity – like the rest of us.
North Yorkshire-based Black Sheep Brewery’s sales and marketing director Jo Theakston says: “From our point of view we are still very much in the dark. I think the wider reaching issue for the brewing and pub world is the very real dent that this uncertainty is putting into consumer confidence.
“In my view it all trickles down from the lack of direction and decision-making from the Government and we’re starting to see that coming home to roost in the actions of some of the major global companies not investing in the UK or moving production away from the UK – Nissan, Honda, etc.
“This leads to job losses particularly in our region and therefore less consumer spend on things like beer. Because of this uncertainty this trickle-down of lack of confidence hits SMEs as well who are being cautious about investment in their businesses.
“In terms of direct impact to businesses like ours, a lot of what we buy is from the UK (but a lot of our hops come from North America), although we are starting to see rises in pricing on things that are sourced from Europe, such as paper for labels and cardboard for trays, though it’s difficult at this stage to tell if it is directly linked to Brexit.
“Our exports have been growing well in the last couple of years, and Brexit has left it uncertain, certainly in the Eurozone. We are starting to see a number of different countries placing ‘Brexit’ orders to try and get decent deliveries in before March 29 so as to avoid any problems or additional costs through tariffs etc which are as yet unspecified.
“For our part, all we can do at this stage is make sure we have the right registrations setup with HMRC that if the Eurozone is overnight suddenly treated like the rest of the world we are in a position to continue trading – albeit with more paperwork.
“The other potential problem I envisage is how beer labelling would be treated once outside of the EU which could potentially create a big cost and production issue in having to produce specific labels for specific countries with different mandatories and marks on them. Given that a lot of brewers’ export volumes are relatively low it may make doing it unviable.
“I think at this stage most people are focusing on the negatives because nobody knows what is going to happen, which breeds nervousness and a lack of confidence. As soon as we know what is happening, that there will be a deal and what that is, or there is more time granted to get to a deal, and clarity emerges, then I am sure there will also be opportunities created as well.”