As procurement director at allmanhall I have been closely analysing the unfolding effects of the new Trade and Cooperation Agreement (TCA) and conclude that whilst we can draw positives from the avoidance of a no deal Brexit, there are several future impacts that we should be aware of.
Not all tariffs have been averted, and whilst many goods will escape these, the new rules of origin requirements, which ensure that third parties pay the requisite tariffs, are less generous, meaning some will face new tariff rates.
These rules, in essence, dictate a manufactured product’s country of origin and are determined by how much processing has been undertaken and the levels of third-country inputs used within the process. It has been reported that many companies have been caught out by the increased levels of administration required to provide proof of origin or have been unexpectedly liable for tariff payments.
There are also significant changes to import and export rules, and this has generated additional red tape and friction. The frictionless cross border trade with the EU that the UK was used to, is no more. For the food and drink sector, these changes include sanitary and phytosanitary controls, which are measures to protect human, animal and plant health.
“Any suggestions that these costs will not lead to an increase in food prices should be taken with a really hefty pinch of salt” – Dominic Gouldie, head of international trade at FDF.
Whilst the disruption of a no deal scenario has been avoided, the full cost impacts relating to rules of origin, border checks and their associated costs will be felt once post lockdown trade volumes normalise and UK border checks are fully implemented. This is when we will start to understand how organisations and supply chains are adapting and the scale of any cost and quality impacts. Further afield, we wait to see the potential benefits of new trade agreements.
There are 4 key things catering operations within schools can be doing:
Stocking up – increasing stock levels of ambient and frozen products may alleviate any initial challenges on fresh produce from the EU. Using frozen veg and tinned fruit may need to be an option.
Using a higher proportion of UK product — this should reduce the chance of border disruption. However, do be aware that constituent ingredients used in UK food manufacture may be impacted.
Being flexible around your offering — be prepared to order own-label instead of branded goods where availability issues or cost increases occur. There may be a need to be flexible on the quality of fresh produce. You can also increase your order lead time. For example, it is not recommended to order day 1 for delivery on day 2 for use on day 2. Operational flexibility is key. Supply disruption may cause increased product substitutions, so it is imperative that your allergen management processes and best practice are followed.
Communicating — ensure that you are regularly talking to your suppliers and advising your consumers and wider stakeholders to ensure that supply challenges are understood. With the added level of disruption and change in delivery days and routes due to recent Covid-19 lockdown, this need for communication is vital.
Established in 2006, allmanhall is an independent, family owned and managed business providing expert food procurement and supply chain management, combined with hands-on catering and nutrition advice. Working in a partnership with its Independent Education clients, allmanhall’s purpose is to deliver the best food, the best cost savings, and the best support.
For more information, please visit allmanhall.co.uk