Since Brexit, (the smaller) whisky and gin distillers from the UK are having a particularly hard time exporting their products to the EU. The reason is very straightforward. Due to Brexit, the excise tax systems are no longer linked, which means all goods are stuck in warehouses awaiting the completion of formalities.
An accumulation of problems
Dutch newspaper Het Financieele Dagblad told the story of several UK distilleries. The article reads like one long “I told you so” plead on the impact that Brexit would have on trade flows between the UK and the EU. The misery that the smaller players, in particular, are facing is exactly the one they were warned about in the run-up to 1 January this year. A reality constantly minimised by British Prime Minister Boris Johnson. Previously, it became clear that you have to be careful when ordering from British webshops.
Especially for goods subject to excise tax, the problems – and the bottles in the warehouses – are piling up. In theory, the international trade of those goods is subject to the suspension of excise tax until the products reach the end-users on the market. When the UK was still part of the EU, it was also part of the internal system that regulated the suspension automatically.
Since Brexit, however, the systems between the UK and the European trade bloc have been disconnected. Consequently, the formalities for the correct processing of these goods have since become a tangled mess for manufacturers and transporters.
Europe on another planet
In practice, a shipment of gin or whisky for the European market must first be completely processed within the British excise system. Then, a registered consignor – an intermediary authorised to ship such goods under the excise suspension scheme – has to re-register the goods from scratch in the European system. A difficult job, in which errors occur easily. Certainly, because the right knowledge regarding the procedures is not available everywhere.
The big players, who have their logistics in their own hands, manage to still get through this. But the smaller players, who depend on logistics partners, can’t get through it. “At the moment, it feels like Europe is on another planet,” the Dutch newspaper quotes a distillery from Edinburgh.
No panic insight
Small players do not achieve the volumes to fill a full truck that can be shipped to mainland Europe. This means that a transporter has to go through the entire paperwork for each pallet of cargo. The consequences are obvious: many transporters prefer to ignore goods subject to excise tax, out of fear that one specific pallet will hold up a whole shipment. This applies not only to alcohol but also to fuel and tobacco.
Of course, the frustration of the British distilleries is great. Although, one can’t help but notice that there is no sign of panic. No one seems to think that this situation will result in big problems for the distilleries. But, European enthusiasts will notice it will become increasingly difficult to find certain British gins or whiskies in mainland Europe in the near future. “It’s easier now to send those bottles to America. It’s ridiculous,” concludes one of the distillers.
