Thread by @DanielLambert29

We are now 18 months into Brexit and after huge disruption to my business I can finally get a real picture, in financial terms, of just what a bad move Brexit it has been for my company and every other importer.

Pre-Brexit, shipping goods was relatively straightforward from the EU. Order, collection and delivery within 7-10 days was the norm from every part of the EU, which accounts for 66.6% of all wine consumed in the U.K.

The average cost was £170-£190 per single pallet for the logistics and this pallet could be mixed with multiple suppliers (not anymore) including EU movement documents. These were the only costs. So in other words easy and cheap to trade.

Now let’s contrast and move to where we are today by each EU country. France is by far my biggest region for importation. On average my lead time from order to delivery has moved from 10 days to 26 days. This makes a big difference over 250 SKU’s.

The fastest lead times today are with Spain which now regularly takes 14-21 days, Portugal slightly longer, Germany and Austria is 28-35 days, and the worst is Italy which has taken 45-70 days over the last three shipments.

Costs too have changed dramatically. The fixed logistics charge of £180 is a distant memory! The single pallet rate from France is now £280, for Spain it’s £270, Germany £310, Austria £340, & Italy it’s £340. I should add these are the best rate single pallet rates we have found.

Now in addition to this we have the paperwork fees and this is really where things have got expensive. These costs are charged by brokers working along side hauliers create the clearance docs on the EU side and the U.K.

The paperwork costs vary depending on the haulier used, as some have there own in house customs department and others out source the work. The cheapest I have seen is £25 per export and import document and the most expensive is £150.

Once again the systems required on both sides of the channel to create these documents is free to use once your registered to use them, so you do need to ask why are these fees so high?

My company doesn’t pay the U.K. side as we have access to the required systems. But this has actually made it more difficult in some cases to use the cheapest logistics companies as they did not want us to do our own U.K. documents. Profiteering maybe?

So to the raw numbers per single pallet shipped inc paperwork declarations. France is now £165 more expensive, Spain £155, Italy £180, Germany and Austria £150. There would be an additional £65 from all EU countries if I didn’t do the U.K. docs.

A pallet of wine holds an average of 672 bottles, the most is 840 for light weight bottles and 480 for Sparkling wine. So the average increase per bottle just for logistics since Brexit is 25p. I have not inc fuel surcharges which is a different issue.

You then have the additional staffing which in our case has been a full time member of staff only working in Brexit related paperwork 39 hours a week. That’s a further 13p per bottle on every we ship.

We have then needed to hold more stock due to the unreliable lead times which means more capital is locked up in stock. I still don’t have a firm figure for this but my best estimate is a further 20p a bottle. Remember this is just to stand still and offer our regular service.

So our cost have increased with zero benefits to anyone by 58p a bottle. Once margins are are applied at the usual wholesaler and retailer percentages this 58p becomes over £1.50 a bottle FOR NO BENEFITS TO ANYONE, and it’s you the consumer that’s paying this.

Now of course the Covid re-boot is also having a massive effect on global supply chains, we see this clearly with our shipments from the rest of the world where lead times have tripled and shipping cost have also tripled.

This has meant that as much as we want to by selling a global selection of wines, pure geography means it’s EU wines that continue to have a firm grip on UK sales. Its for this reason why I believe Brexit is such a bad concept & will never work despite all the gaslighting from BJ

My conclusion is very simple. Not matter how many FTAs the U.K. gets, the one with our nearest neighbours is the most important. You can’t argue against geography, and the Global Covid reboot clearly shows this. We live in a just in time world, Brexit is the exact opposite.

Moreover in a world where we need to use less energy and reduce CO2, buying locally matters like never before. So the obvious answer is stronger relationships with your nearest neighbours. It really is as simple as that in my opinion.

Finally please don’t forget the alcohol reform bill, this is where government actually want to make wine importation even more difficult. Currently 3 levels of tax are applied, but they want 27. Yes 27. Yes you guessed it even higher prices for no benefit to anyone.

Some of you have been asking about about the new tax system that will make wine even more costly with an unworkable import declaration system. Here is the @wstauk @WSTA_Miles to explain in more details.

https://twitter.com/wstauk/status/1527938511764070405

So @Helen_Whately and @RishiSunak this weekend I have updated how #BrexitReality is going in the wine world. I also thought I would let the UK on your big secret to have 27 levels of wine taxation. It’s fair to say nobody’s impressed with your plan. Quite the opposite…