Dear Valued Customer,
2020 has been consumed by the COVID-19 pandemic, however as we approach the end of 2020 we understand the continued uncertainty surrounding Brexit and its imminent deadline. Please be assured that VOW Wholesale are here to support you throughout whatever the deal or no deal outcome may bring and now is the time for us to update you on our position be it deal or no deal.
VOW Wholesale – BREXIT STATEMENT
VOW Wholesale is taking all reasonable steps to mitigate the potential impacts of Brexit. We have identified that the primary risks are as follows:
(1) Supply Chain Delays
It is likely that the import arrangements for goods from the EU to Great Britain (England, Scotland and Wales) will be impacted at the end of the transition period. This could mean that disruption for supply chains becomes a more tangible risk, but VOW Wholesale is prepared and ready to adapt to new processes and activities to smooth the transition.
New Customs Arrangements
We have been working through the key challenges and assessing how the rules for imports between the EU and GB may change after the transition period. The government has introduced a new staged approach to imports from the EU as of January 2021, which will apply both in a deal or no deal scenario, with the intention of facilitating the smooth flow of goods.
From January 2021:
- The import of standard goods will be covered by basic customs requirements, such as keeping sufficient records of imported goods. Any physical checks will be conducted at the point of destination until July 2021. VOW Wholesale works with both experienced freight forwarders and supply chain partners, who are prepared for these requirements.
- Our freight forwarders and supply chain partners are preparing for the introduction of the goods Vehicle Movement Service (GVMS), which will be introduced from January. The GVMS will most likely work on a ‘pre-lodgement’ model, where goods arriving at ports will have already made a customs declaration. The GVMS will be in place fully by July 2021 to facilitate smooth movement of goods.
- We have made all necessary arrangements to account for and pay VAT on imported goods. We understand that there will be up to six months to complete the relevant customs declarations. While tariffs may be payable on certain goods that we supply, the actual payment can be deferred until the customs declaration has been made, allowing these activities to run in parallel and reducing the risk of delays.
From July 2021:
- Importers moving any goods will have to make full customs declarations at the point of importation and pay relevant tariffs.
- The GVMS will be fully in place for all imports and transit movements at those border locations that have chosen to introduce it.
After July, the trading conditions under which we will operate depends on the outcome of the negotiations with the EU. But as the UK government has put the above measures for EU imports in place unilaterally, they will apply in both a “Deal” and a “No Deal” scenario, reducing the risk of supply disruption.
Risk Mitigation
The only products that VOW Wholesale imports directly are private label lines from the Far East. The imports of our private label products from Far East factories come into the UK via Southampton or Felixstowe. The intake at these ports is 95%+ deep sea vessels from outside the EU, so any disruption should be very limited. There will be no changes to the customs procedure for orders coming from outside the EU and our freight forwarder is confident that we will not see material delays due to Brexit.
With regards to other products, VOW Wholesale’s Merchandising team has been working with our vendors to identify possible risks to supply and mitigate them wherever possible. We are planning to buy an additional £5m of stock by the end of this year.
(2) Cost Increases
It is possible that the value of Sterling will fall following Brexit, which would make imports of both raw materials and finished products more expensive. It is also possible that tariffs will be payable on some imported goods.
As the UK’s largest Business Supplies Wholesaler, VOW Wholesale will continue to leverage our purchasing power as much as possible, to secure the best possible prices.
Nonetheless, it is possible that VOW Wholesale will be forced to take significant cost increases as a result of Brexit, that are wholly beyond our control and that we cannot avoid or absorb, these may result in price increases having to be applied with short notice.
(3) Staff Shortages
VOW Wholesale employs some EU citizens within its operations. The large majority of them hold permanent positions, after we acted earlier this year to mitigate the risk of staff choosing to leave the UK after Brexit was confirmed. We believe that most – if not all – will continue to work for us into 2021 and beyond.
Clearly other risks may emerge as the precise form of our exit from the EU becomes clearer. In all events, however, VOW Wholesale is committed to communicating all issues that arise to its customers as soon as they emerge, openly and honestly, and mitigating any impacts on service and/or pricing as much as reasonably possible.
Adrian Butler
Managing Director
VOW Wholesale
