Brexit: Supply of Goods

Key considerations: your suppliers

Imposition of tariffs and customs controls on trade with the EU is likely to increase the cost of imports.  Introduction of customs controls could also disrupt trade flows, particularly for HGV traffic via the Channel ports and for businesses reliant on "just in time" distribution (which typically have limited storage capacity).  Consider the following:

• Does your business rely on supplies of goods originating in the EU or in countries with which the EU has a Free Trade Agreement (which may cease to apply on Brexit)?  If you rely on suppliers based in the UK, such as wholesalers, do you know how far they are reliant on products sourced from the EU?
• Do you know what tariffs will apply to those goods if trade with the EU is based on WTO rules only or the relevant EU FTA ceases to apply?  Could you pass on or absorb the increased price or do you need to explore alternative sources of supply (potentially involving sourcing of goods from within the UK or from outside the EU)? 
• How would your business be affected if there is disruption to e.g. HGV traffic through the Channel ports due to the introduction of customs controls (see Brexit: Customs Arrangements)?  In particular, do you rely on just-in-time distribution?  Consider what can realistically be done to mitigate the effects of such disruption e.g.:
  • exploring alternative sources of supply either from within the UK or from outside the EU;
  • increasing UK storage capacity to accommodate a "reserve stock" which could be drawn upon if just-in-time deliveries are seriously disrupted; and/or
  • ensuring that your wholesaler or logistics provider has adequate contingency plans in place.

Key considerations: supplying your customers

• If you export goods to customers in the EU or in countries with which the EU has an FTA, do you know what tariffs will apply under WTO rules?  What impact will tariffs have on pricing?  Have you made provision for additional transaction costs due to increased border red tape?
• Will your products face technical or regulatory barriers on Brexit – for example, if there is no agreement with the EU on mutual recognition of product standards? See also Brexit: Operational Risk & Environment.
• Is it necessary for your business to establish a presence in the EU or to appoint an EU representative?  For example, EU product safety rules require suppliers which are based outside the EU to appoint an authorised representative in the EU (in many cases, the importer/distributor of the products is appointed as the authorised representative). See also: Brexit: Data Protection, IT and E-Commerce.
• How would your business be affected if there is disruption to e.g. HGV traffic through the Channel ports due to the introduction of customs controls (see Brexit: Customs arrangements)? Consider what can realistically be done to mitigate the effects of such disruption e.g.
  • exploring alternative transportation arrangements such as short sea shipping;
  • increasing storage capacity in the EU to accommodate a "reserve stock" which could be drawn upon if deliveries from the UK are seriously disrupted; and/or
  • ensuring that your EU distributor or logistics provider has adequate contingency plans in place.