It has now been a couple of months since the United Kingdom's new trading regime with the European Union (EU) came into force and while the newspaper headlines may be fading, food business operators (FBOs) are facing long-lasting challenges when it comes to exporting their products to the EU. Essentially, these challenges boil down to organisational issues such as additional bureaucracy, more (and more complex) paperwork and the associated financial cost. While larger FBOs may be able to cope with the added complexity and cost, smaller FBOs may find the increased burden uneconomic.
One solution to the issue may be to set up an operation in a member state of the EU in order to streamline exports to the whole bloc. An obvious choice due to its proximity and common language for such an operation is in Ireland. As recently reported in The Grocer magazine, the Somerset cheese producer, Wyke Farms, has done just that and set up an Irish company to facilitate with its exports to the EU. The operation includes a team of six staff whose job it is to fill out export documentation.
In addition to streamlining the export operation, the Irish company also acts a consolidator for other smaller cheese suppliers. The consolidator model allows smaller FBOs which are struggling with the cost of the additional, upfront paperwork, to use the Irish company to export in bulk from a number of different suppliers. By increasing the volume of products exported, consolidators can minimise the export costs.
WM comment
Time will tell whether this business model becomes popular. If you are interested in exploring the possibility of setting up in Ireland, the International Trade team at Walker Morris would be happy to help.
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