Since the UK left the EU single market on January 1 this year the Financial Times has been [tracking the fortunes of three small British companies](https://archive.md/gilmc) as they adjust to trading under new rules set out in the EU-UK Trade and Cooperation Agreement.
Twelve months into the post-Brexit regime, the three companies — a tea maker, a haulier and a manufacturer — reflect on a year of continuous upheaval.
–
*The Tea Maker*
For Kiran Tawadey, owner of the Hampstead Tea company, it has been a heartbreaking decision but on January 1 she will shut down her UK manufacturing operation as a result of border bureaucracy brought in by Brexit. Five full-time employees will be made redundant.
Putting sentiment aside, Tawadey says that the decision to close the small packing plant in Milton Keynes after 10 years was a commercial no-brainer as exporting her probiotic teas to Europe had just become too expensive and unreliable after Brexit.
Last June Tawadey opened a subsidiary in the Netherlands to reliably service her growing list of EU clients that include the French supermarket chain Monoprix, Italian grocery giant Esselunga and German organic health food retailer Alnatura.
Using a Dutch logistics hub enabled Tawadey to import her organic teas into the EU in bulk, clearing customs in one go and avoiding the need to grapple with 27 different VAT and national customs authorities. Shutting her UK plant was simply the next logical step.
“Our EU business is flying at the moment and we just felt we need to focus on delivering to customers via our third party logistics centre in Holland,” she said. “Having our own factory in the UK became too complicated.”
The final decision came in October when her warehouse manager “saw the writing on the wall” and quit his job, and then the landlord asked for a 40 per cent rent increase. The combination of skills shortages and rising costs made the decision.
“We couldn’t hire a new manager or a forklift driver; costs in the UK were going through the roof. It all suddenly became clear,” she said.
Tawadey will now outsource the blending and packing of her loose teas to a third-party contractor, possibly inside the EU, as she concentrates on expanding her business out of continental Europe, including to the rest of the world.
She recounted how on a recent visit to a trade fair in Malmo, Sweden, the direction of travel for UK businesses exporting to the EU was clear. “The first question was ‘do you have an EU operation, because we can’t buy your product from the UK’. The minute we said we were EU-based, we were inundated with interest,” she said.
She added that clients in Japan, Australia and the rest of the world are now also increasingly requesting to be serviced out of the EU hub, preferring Rotterdam to using UK ports. In time, Tawadey says, she can see her entire operation moving to the EU, and servicing UK clients by exporting back to her home country.
Looking back on the year she now feels quite optimistic for her business, which made more than £100,000 net profit in 2020 but may only just break even this year thanks to Brexit disruption in the first half of the year alongside the investment costs of setting up in the Netherlands and the general escalating costs of raw materials and transportation.
However, Tawadey believes that growing sales in the EU in 2022 and the trimming of the UK cost base will lead to renewed profits next year. “I’ve got over the emotional rollercoaster about it all. We have to be pragmatic,” she concludes. “I just don’t know whether the powers-that-be in London know, or even care, about what is happening.”
–
*The Trucker*
Paul Jackson, of Chiltern Distribution, was optimistic that Brexit would provide opportunities for his Peterborough-based haulage company, which specialises in temperature-controlled products such as medicines and fresh fruit.
After 2016 Jackson [invested more than £1m](https://archive.md/M0BUL) in new staff and software to streamline deliveries of citrus fruits from Spain and pharmaceuticals from European manufacturing hubs. Some 40 per cent of his business was EU trade.
But a year into the new regime Jackson says that his EU business has collapsed to “almost zero” and his fleet of 50 articulated lorries and sprinter vans is almost entirely deployed in the UK.
He blames a [British government decision](https://archive.md/XnhFd) to relax post-Brexit rules that had restricted the number of pick-ups and drop-offs EU drivers can perform in the UK — so called “cabotage” — leaving them free to undercut more expensive UK drivers.
With lower wages and extended-range lorries equipped with 1,300-litre fuel tanks filled with cheap diesel, EU drivers were now able to operate on UK roads at much lower costs than UK drivers.
As a result, Jackson said that delivery rates to and from Europe, which had attracted a premium in the first three months of the year as EU drivers stayed away from the UK to avoid getting caught up in border delays, were no longer attractive.
“In a nutshell, we’ve got all the worst bits of Brexit and none of the good things. There’s been no advantages from our perspective,” he said. “The promises that were made around borders, and EU hauliers not being allowed into the UK — that there would be a level playing field — well, that’s not happened.”
The only minor upside of Brexit, Jackson said, had been a 20 per cent increase in pick-ups of loads from Portsmouth as a growing number of EU shippers sent unaccompanied trailers in order to bypass border issues.
Jackson concluded that Chiltern would not be making new investments ahead of the UK government introducing new controls on imports from the EU to the UK in 2022. “We’ll not be making the same mistake twice,” he said. “We’ll just wait and see.”
–
*The Manufacturer*
Mandy Ridyard wants the government to finally deliver what was promised before Brexit: a set of good trade deals with major export markets in countries, such as the US, that matter to the UK manufacturing industry.
“We want to take advantage of trade deals,” said Ridyard, financial director at Produmax, which makes aerospace components near Shipley, West Yorkshire.
Instead, her company has spent the year faced with more red tape than ever before as she tried to navigate new border controls when supplying factories in Northern Ireland, which make up about a fifth of Produmax’s sales.
This has meant additional costs for the business, which employs 74 people, contrasting with the “global Britain” vision of free trade projected by Brexit campaigners ahead of the UK’s exit from the EU.
“We have an extra internal border now. There is a lot of extra paperwork — and a lot of extra cost that goes with it,” Ridyard said.
She added that it “doesn’t seem right” that moving products to Northern Ireland involves the same procedures as shipments to the Philippines, another major market for Produmax.
“[It’s] now treated as a foreign country. There is a knock on cost as it just means more HMRC paperwork. There is always a cost,” she said, referring to the UK tax authority.
Twelve months after Brexit, the impact has just been a “hassle” with none of the upside, she added.
Ridyard’s other concern is the prospect of further shortages of labour and skills caused by the pandemic and by Brexit deterring workers from the EU from working in the supply chain. “This is a worry for the hauliers trying to get goods to us.”
–
*Peter Foster in Brighton and Daniel Thomas in London* Monday December 20 2021
None of this was a surprise to anyone not wanting Brexit. We lose rights, give ourselves more restrictions and red tape, increase costs… Name a single benefit…
I know Brexit has completely screwed me over and restricts my ability to live and work in Europe (I tried, but being self employed was denied any work/residnce permit). Apart from barely having any time in Europe now (limited to 90 days which is a major pain to keep track of) it’s now harder, if not impossible to work legally doing the same work I was doing.
One simple question to all these small businesses owners:how have you voted in the EU referendum? If you voted to leave you have only yourself to blame.
>“In a nutshell, we’ve got all the worst bits of Brexit and none of the good things. There’s been no advantages from our perspective,” he said. “The promises that were made around borders, and EU hauliers not being allowed into the UK — that there would be a level playing field — well, that’s not happened.”
Oh, wow, a lot to unpack there!
He thought that the UK would ban EU hauliers from the country.
All the while he hoped for the so called “level playing field” – a term that usually means that it is expected that the Uk retains most or even all of their rights while the EU can go f*ck themselves.
Seriously, these people deserve all they get for their sheer idiocy – its just a shame that they drag so many fellow countrymen down with them.
4 comments
Since the UK left the EU single market on January 1 this year the Financial Times has been [tracking the fortunes of three small British companies](https://archive.md/gilmc) as they adjust to trading under new rules set out in the EU-UK Trade and Cooperation Agreement.
Twelve months into the post-Brexit regime, the three companies — a tea maker, a haulier and a manufacturer — reflect on a year of continuous upheaval.
–
*The Tea Maker*
For Kiran Tawadey, owner of the Hampstead Tea company, it has been a heartbreaking decision but on January 1 she will shut down her UK manufacturing operation as a result of border bureaucracy brought in by Brexit. Five full-time employees will be made redundant.
Putting sentiment aside, Tawadey says that the decision to close the small packing plant in Milton Keynes after 10 years was a commercial no-brainer as exporting her probiotic teas to Europe had just become too expensive and unreliable after Brexit.
Last June Tawadey opened a subsidiary in the Netherlands to reliably service her growing list of EU clients that include the French supermarket chain Monoprix, Italian grocery giant Esselunga and German organic health food retailer Alnatura.
Using a Dutch logistics hub enabled Tawadey to import her organic teas into the EU in bulk, clearing customs in one go and avoiding the need to grapple with 27 different VAT and national customs authorities. Shutting her UK plant was simply the next logical step.
“Our EU business is flying at the moment and we just felt we need to focus on delivering to customers via our third party logistics centre in Holland,” she said. “Having our own factory in the UK became too complicated.”
The final decision came in October when her warehouse manager “saw the writing on the wall” and quit his job, and then the landlord asked for a 40 per cent rent increase. The combination of skills shortages and rising costs made the decision.
“We couldn’t hire a new manager or a forklift driver; costs in the UK were going through the roof. It all suddenly became clear,” she said.
Tawadey will now outsource the blending and packing of her loose teas to a third-party contractor, possibly inside the EU, as she concentrates on expanding her business out of continental Europe, including to the rest of the world.
She recounted how on a recent visit to a trade fair in Malmo, Sweden, the direction of travel for UK businesses exporting to the EU was clear. “The first question was ‘do you have an EU operation, because we can’t buy your product from the UK’. The minute we said we were EU-based, we were inundated with interest,” she said.
She added that clients in Japan, Australia and the rest of the world are now also increasingly requesting to be serviced out of the EU hub, preferring Rotterdam to using UK ports. In time, Tawadey says, she can see her entire operation moving to the EU, and servicing UK clients by exporting back to her home country.
Looking back on the year she now feels quite optimistic for her business, which made more than £100,000 net profit in 2020 but may only just break even this year thanks to Brexit disruption in the first half of the year alongside the investment costs of setting up in the Netherlands and the general escalating costs of raw materials and transportation.
However, Tawadey believes that growing sales in the EU in 2022 and the trimming of the UK cost base will lead to renewed profits next year. “I’ve got over the emotional rollercoaster about it all. We have to be pragmatic,” she concludes. “I just don’t know whether the powers-that-be in London know, or even care, about what is happening.”
–
*The Trucker*
Paul Jackson, of Chiltern Distribution, was optimistic that Brexit would provide opportunities for his Peterborough-based haulage company, which specialises in temperature-controlled products such as medicines and fresh fruit.
After 2016 Jackson [invested more than £1m](https://archive.md/M0BUL) in new staff and software to streamline deliveries of citrus fruits from Spain and pharmaceuticals from European manufacturing hubs. Some 40 per cent of his business was EU trade.
But a year into the new regime Jackson says that his EU business has collapsed to “almost zero” and his fleet of 50 articulated lorries and sprinter vans is almost entirely deployed in the UK.
He blames a [British government decision](https://archive.md/XnhFd) to relax post-Brexit rules that had restricted the number of pick-ups and drop-offs EU drivers can perform in the UK — so called “cabotage” — leaving them free to undercut more expensive UK drivers.
With lower wages and extended-range lorries equipped with 1,300-litre fuel tanks filled with cheap diesel, EU drivers were now able to operate on UK roads at much lower costs than UK drivers.
As a result, Jackson said that delivery rates to and from Europe, which had attracted a premium in the first three months of the year as EU drivers stayed away from the UK to avoid getting caught up in border delays, were no longer attractive.
“In a nutshell, we’ve got all the worst bits of Brexit and none of the good things. There’s been no advantages from our perspective,” he said. “The promises that were made around borders, and EU hauliers not being allowed into the UK — that there would be a level playing field — well, that’s not happened.”
The only minor upside of Brexit, Jackson said, had been a 20 per cent increase in pick-ups of loads from Portsmouth as a growing number of EU shippers sent unaccompanied trailers in order to bypass border issues.
Jackson concluded that Chiltern would not be making new investments ahead of the UK government introducing new controls on imports from the EU to the UK in 2022. “We’ll not be making the same mistake twice,” he said. “We’ll just wait and see.”
–
*The Manufacturer*
Mandy Ridyard wants the government to finally deliver what was promised before Brexit: a set of good trade deals with major export markets in countries, such as the US, that matter to the UK manufacturing industry.
“We want to take advantage of trade deals,” said Ridyard, financial director at Produmax, which makes aerospace components near Shipley, West Yorkshire.
Instead, her company has spent the year faced with more red tape than ever before as she tried to navigate new border controls when supplying factories in Northern Ireland, which make up about a fifth of Produmax’s sales.
This has meant additional costs for the business, which employs 74 people, contrasting with the “global Britain” vision of free trade projected by Brexit campaigners ahead of the UK’s exit from the EU.
“We have an extra internal border now. There is a lot of extra paperwork — and a lot of extra cost that goes with it,” Ridyard said.
She added that it “doesn’t seem right” that moving products to Northern Ireland involves the same procedures as shipments to the Philippines, another major market for Produmax.
“[It’s] now treated as a foreign country. There is a knock on cost as it just means more HMRC paperwork. There is always a cost,” she said, referring to the UK tax authority.
Twelve months after Brexit, the impact has just been a “hassle” with none of the upside, she added.
Ridyard’s other concern is the prospect of further shortages of labour and skills caused by the pandemic and by Brexit deterring workers from the EU from working in the supply chain. “This is a worry for the hauliers trying to get goods to us.”
–
*Peter Foster in Brighton and Daniel Thomas in London* Monday December 20 2021
None of this was a surprise to anyone not wanting Brexit. We lose rights, give ourselves more restrictions and red tape, increase costs… Name a single benefit…
I know Brexit has completely screwed me over and restricts my ability to live and work in Europe (I tried, but being self employed was denied any work/residnce permit). Apart from barely having any time in Europe now (limited to 90 days which is a major pain to keep track of) it’s now harder, if not impossible to work legally doing the same work I was doing.
One simple question to all these small businesses owners:how have you voted in the EU referendum? If you voted to leave you have only yourself to blame.
>“In a nutshell, we’ve got all the worst bits of Brexit and none of the good things. There’s been no advantages from our perspective,” he said. “The promises that were made around borders, and EU hauliers not being allowed into the UK — that there would be a level playing field — well, that’s not happened.”
Oh, wow, a lot to unpack there!
He thought that the UK would ban EU hauliers from the country.
All the while he hoped for the so called “level playing field” – a term that usually means that it is expected that the Uk retains most or even all of their rights while the EU can go f*ck themselves.
Seriously, these people deserve all they get for their sheer idiocy – its just a shame that they drag so many fellow countrymen down with them.