Post-Brexit paperwork and extra costs hurt UK alcohol importers
United Kingdom | The UK has now been out of the EU for an entire month. One scenario – miles-long queues at the Channel Tunnel and the port of Dover – has not materialised, but the ripple effects of Brexit have touched many consumers and businesses in the UK.
Most prominently, Amazon stopped selling wines, beers and spirits to its customers in Northern Ireland, as it wrestles with new customs rules post-Brexit. The online retailer is concerned that excise duty – a tax – will now have to be paid twice on all shipments of alcohol which are sent from the British mainland across the Irish Sea.
To avoid a hard border on the island of Ireland after Brexit, a customs border was created down the Irish Sea, meaning Northern Ireland remained part of the single market for goods after the rest of the UK departed.
Beer webshops suspend shipments
In fact, sending stuff to the UK has become a lot more expensive and difficult. The BBC notes that a number of smaller, specialised online retailers have announced on their websites that they will no longer be supplying to the UK. For example, Omnipollo’s and Beers of Belgium’s webshops have suspended shipments, while the Mikkeller webshop has tripled its shipping rates to the UK to GBP 30 (USD 41).
The Financial Times newspaper estimates that bureaucracy alone could add 10 percent in costs to a GBP 12 (USD 16.50) bottle of imported wine. The Portuguese retailer, Portugal Vineyards, told customers that one of its bestselling wines, Vidigal Porta 6, which had retailed at about GBP 4.70 (USD 6.50) including taxes and shipping, would now cost between GBP 7 and GBP 8 (USD 9.60 – USD 11).
Drowning in extra paperwork
Then there is logistics to deal with. Martyn Railton, founder of speciality beer importer Euroboozer, was quoted in a piece on goodbeerhunting.com, saying that his logistics costs went up by GBP 400 (USD 550) or around 20 percent per shipment, on top of around GBP 2.50 in fees for each individual product he brings over. On a container of mixed pallets from, say, Danish craft brewer Mikkeller, that could mean another GBP 100 or more.
Agreeing on a fee with the logistics company is one thing – finding a driver willing to deal with the new customs procedures and related delays at UK ports is another.
In January, nearly 70 percent of all lorries bringing goods into Britain were returning to Europe empty as UK exports to the continent dipped 68 percent over January 2020.
Prices will go up
Most likely, beer importers will absorb the additional costs for a while. But the price of an imported beer will need to go up eventually. The question is, how much of the extra cost will be passed on to consumers, and how will this affect demand?
The UK was put into a third national lockdown on 4 January, and pubs are expected to remain fully closed until March at the earliest. The covid-19 pandemic has made selling alcohol a real challenge. The industry does not need extra hurdles to purchase things as well.
