It has been more than three months since the UK completed the transition period and officially entered into new trading terms with the EU (although grace periods are still in place). The deal which was rushed through at the end of December and implemented on the 1 January has already affected how our local businesses are trading. I have been looking into how they have adapted to the new trading rules. Barry from BJW logistics, Vicky from Lyonsleaf, Matilda of Burrow Hill Cider, Mike of Barbers cheese and Giles of the Wild Beer Co. have all given their thoughts on the deal and Barry’s have been updated to reflect the latest news.
Now I have spoken to Guy Burt about his business, 5kind.
5Kind manufactures massage gels, body conditioning creams and health supplements to sell to the UK, EU and across the world from their base in Wellington, Somerset.
I asked Guy about his company:
“We are a dedicated team of medical professionals and development chemists, with the aim of harnessing mother nature’s wonderful extracts to offer great products for your skin and body.
We were motivated to start this business to find a solution to our children’s eczema, something they they can apply easily to protect and soothe their skin. We have spent the last three years developing a formula that is an organic oil emollient. The aim of 5-Kind, is to ensure we have at least 5 active ingredients within the formula that will be as effective as possible, and be kind to your skin…”
How is your company set up?
“We have embraced e-commerce with our website attracting customers from every part of the UK and the rest of the world including the US, Australia, Canada and of course many countries in the EU. Before January 45 per cent of our business went inside the EU.”
So how did 5kind prepare for Brexit?
“It was very difficult to plan for Brexit as the deal was so late in coming, so we planned for the worst outcome as well as we could. This involved stocking our products into warehouses in the EU and registering for VAT in 6 countries.”
So, Brexit has gone smoothly for you then?
“Far from it; it has been a real headache. Where do I start? We needed to send a pallet of labels to the EU for our stock. Despite being zero-rated for duty (according to the deal between the UK and EU) the consignment has attracted duty of £500. We will have to swallow this if we want to trade in any reasonable time.”
“What the government has failed to understand is that we have to deal with 27 different customs borders who have all been given no time to adjust. As it is, our own customs are struggling with the new rules and how to apply them, so how do they expect every country in the EU to have their custom system up and running, even supposing there is the will?”
“Then there is the haulage, I have had to phone five companies before I have found one willing to take goods into the EU. Before January I would pick up the phone to a carrier and 4 days later the goods would be at the destination, now it takes at least a month if there are no problems and costs 50 per cent more.”
“I recently sent some of our product to a customer in France; despite having all the correct paperwork it has ended up in a bonded warehouse. I will have to try to persuade the customer to get his goods released, or more likely they will just demand a refund and take their custom elsewhere.”
So, you are worried that you will lose customers?
“It’s a real worry; we do have a very loyal following that we have built up over the years with the same customers coming back time and again but this loyalty will ebb away if we cannot deliver our products.”
“It’s not just goods leaving the UK either. Unrelated to my business I had to get a part for my boiler recently: after phoning 11 companies I discovered that I just could not get this part as no one was prepared to bring it into the country. In the end I gave up and found a company that refurbished the broken part, but this just shows the problems that are being caused.”
So how could the government support businesses like yours?
“Well, that is difficult; they have made such a mess of things by leaving it so late to get the trade deal. We were promised frictionless trade, but while we are outside the common market and customs union that is clearly not possible. No matter how much the government puts into our borders and customs, at the moment it is still wholly insufficient, as well as running antiquated systems. It’s not in their power to get sovereign nations inside the EU to speed up and simplify theirs.”
How will your business progress in the future?
“5kind is well placed for the future as our products are sought after and our customers are very loyal. Although trading has been made much harder for us, we will adapt and find ways to thrive.”
If, like Guy, your business has a story to tell, West Country Bylines would like to hear it.