Brexit and Covid-19 chaos cause confectionery exports to plummet
Export sales have plummeted since the UK finally dropped out of the EU at the start of the year. Germany's confectionery industry is responsible for as much as 20% of all food shipments from Germany to the UK. Several cross-channel shipments take place every week, but the last-minute trade deal struck between the EU and the UK has made matters extremely complicated and difficult.
As many as 58% of the members recently surveyed by the BDSI state that the new and complex clearing formalities in place are the biggest challenge for smooth logistics. Around 15% are concerned that their products may not be temporarily available in British supermarkets due to new problems in logistics. As many as 9% of companies have even suspended shipments to the UK in January. A lack drivers and Covid-19 related travel restrictions are posing further challenges. Drivers stuck on the roads in the UK for days around Christmas because the new Covid-19 variant found in the UK sparked France to close its borders without warning understandably refuse to travel back to the UK. Further Covid-19 related restrictions would spell more trouble for logistics, in issue over which 18% of companies are concerned.
Drowning in bureaucracy
Yet, even if the coronavirus crisis improves and customs clearances start to run more smoothly, administrative challenges will remain. BDSI Managing Director Dr Carsten Bernoth criticises, that “[t]he rules of origin agreed considerably deviate from previous rules of origin for confectionery and contribute to making duty free delivery more complicated". Bernoth reckons that the rules of origin negotiated by the European commission are solely driven by agricultural protectionism. According to Bernoth:
The EU commission and the member states may be protecting interests related to agricultural products, but they clearly do so to the detriment of small processors, who ensure the highest added value for the EU, but currently have no uniform rules of origin to fall back on for export activities and are drowning in bureaucracy.