Muntons position on Brexit
The decision made by the UK to leave the European Union, or ‘Brexit’ as it has become known, means that we must embrace the challenges that this decision will bring. In order to ensure that our business is sustainable, we have put into effect a number of strategies which will ensure the strongest possible outcome for our company as the transition away from EU membership takes place.
Inevitably there is still a great deal of uncertainty as the Brexit negotiations take place and therefore our plans are intended to allow for a degree of flexibility in the interim period. Assurances have been made by the Government that, following Brexit, farm subsidies would continue to be paid by the UK at the level set within the EU until 2022. This provides some respite in the interim period but at this stage it is impossible to predict the final outcome following this period. The importance of agriculture to the UK economy should ensure that Government policies will be shaped such that they do not place the UK agricultural industry in a disadvantageous position compared with the rest of the EU however we are not complacent.
We recognise that as Brexit unfolds a number of parties will be concerned, including our customers, European based suppliers and our network of agents and distributors. Equally, within our own organisation wide ranging sections of our business are likely to see changes; areas including customer services, sales, procurement, finance, compliance, the samples team, human resources and information technology. We have therefore considered, amongst a number of areas, the potential impact of changes to tariffs and Customs borders, the potential impact on our costs, administrative workload and our employees, but also the effect of increased volatility of exchange rates. In order to strengthen our EU position, we have opened an office in mainland Europe to underline our commitment to our European customers, agents and distributors and our suppliers.
As a prelude, we have already researched the implications of potential tariff and quota restrictions and considered the potential disadvantages, and advantages of these. We have undertaken a review of our supply chain for components and raw materials to mitigate the impact of any major changes following Brexit and explored possible changes needed to our policies and processes. Steps have been taken to mitigate any potential risks concerning EU citizenship of any members of our staff. As a company well versed with the demands of international trade, we have every confidence in the skill and expertise of our administrative staff and their understanding of export procedures to be able to cope with any changes necessitated following Brexit.
We will be undertaking a review of our agents and distributors contracts to ensure that they are relevant. We wish to reassure our partners of our ongoing commitment to continued trade, both within the EU and with our other export markets.
Update on Muntons’ position
In light of the uncertainty surrounding Brexit, we are doing all we can to mitigate any potential risks which may arise.
To that end, we are currently working hard to achieve an HMRC recognised accreditation which will enable us to become an Authorised Economic Operator (AEO). This is a status which exists across the UK and Europe. It is designed to introduce security measures with the purpose of securing the international supply chain. It achieves this by preventing smuggling, tampering, false documentation, identity fraud and theft. The benefits include simplified customs procedures and the possibility of fast tracking shipments in some cases.
As a company involved in the international supply chain, we must ensure that all cargo we control is safe and secure at all times. Having the AEO accreditation will guarantee a secure transit and ensure we are recognised as ‘trusted traders’. In addition, it is crucial we ensure we are fully compliant with customs rules in order to avoid penalties.
We have partnered with a leading Customs compliance consultancy to assist us with our AEO application, Vartan Consultancy. Together with Vartan we are closely monitoring all updates from HMRC regarding the possibility of a ‘No Deal’ Brexit. Vartan are assisting us with Customs training to enable us to deal with the re-introduction of Customs declarations on goods moving between the UK and the EU.
Gaining AEO accreditation will allow Muntons easier access to any facilitation or simplifications that HMRC may introduce in an attempt to prevent delays at Channel ports in the event of a ‘No Deal’ situation. It is likely that access to such facilitations will only be granted to ‘Trusted Traders’, achieving AEO will elevate Muntons to trusted trader status with HMRC.