'Brexit is a bigger problem than Covid ever presented'

A month after Brexit, Munster businesses are struggling with exports and supplies
'Brexit is a bigger problem than Covid ever presented'

Brian Hanly: 'The delays you could cope with if you knew what's going to happen.' Picture: Brian Arthur

Post-Brexit red tape is holding up manufacturing processes, stalling deliveries and cutting off UK customers from Munster businesses.

Brian Hanly of John Hanly & Co Woollen Mills in Tipperary described the situation as a “disaster.” 

"We're only 20 days into it, but it hasn't been a great 20 days.” 

The Tipperary-based Wollen Mill imports most of its raw materials from Europe, but every item designed and weaved at the Mill in Nenagh has to be sent to Scotland for a specialist finishing process, before it is shipped back to be cut, labelled and packaged in Tipperary.

Hanly sends goods to Scotland twice a week, and, pre-Brexit, received goods from Scotland twice a week. This would normally take 24 to 36 hours, he explained.

Since the beginning of this year, just one delivery has reached Hanly’s partner in Scotland, while one has arrived from Scotland.

 Brian Hanly pictured at his Woollen Mills in Nenagh, Co Tipperary. Picture: Brian Arthur

Brian Hanly pictured at his Woollen Mills in Nenagh, Co Tipperary. Picture: Brian Arthur

“Some of it is in Dublin, some of it is in the freight couriers depot in the UK, and everybody has been blamed. Customs are blaming the couriers who are blaming the suppliers.” 

Mr Hanly said workflow at the Mills has been completely disrupted: “This is a bigger problem for me than Covid ever presented.” 

“We've had to stop selling on our own website to the UK.” 

Mr Hanly isn’t alone. A survey by Chartered Accountants Ireland (CAI), three weeks into the new trading environment, has found that more than a third of businesses have stopped shipping goods through Great Britain.

Mr Hanly said they have stopped selling to UK customers through their own website as they currently don’t have a freight company who can say for sure when it will be delivered.

“They talked about getting customers ready. I don't think the customs were ready.” 

Mr Hanly said the uncertainty is his biggest problem at present.

“The delays you could cope with if you knew what's going to happen. If we don't know when the product we're making is going to get processed and be available on the shelves for us, then we can't tell our customers, you'll have it in a week or two weeks.” 

“In this day and age, you're scrambling for any sales you can get, to have to turn around and tell customers I don't have it and I don't even know when I'll have it. I don’t know what to tell them.” 

Like Mr Hanly, CEO of EI Electronics Mick Guinee said he’s hearing the hold-ups are largely coming from the UK side.

“There seems to have be a lot of ignorance on the UK side. I think Irish people were well au fait with the whole thing. The Brits maybe didn't acknowledge it until it came.” 

“There also seems to be a shortage of customs clearance agents in the UK,” he said.

Mr Guinee said the company has not experienced any delays on full consignments shipped.

EI Electronics Founder CEO, Mick Guinee.

EI Electronics Founder CEO, Mick Guinee.

“On a daily basis, we're shipping a 40-foot container to the UK, and on those full consignments, we're not finding any delays. Pick up is here at three o'clock in the afternoon, and it’s delivered to our subsidiary at Oswestry at 10am the following morning, just as it was before.” 

“Where we are seeing delays would be on pallet loads, where our pallets have to be consolidated with other companies to make up a full shipment.” 

“We have all of our paperwork correct, but if it has to be consolidated with somebody else and the customs details aren't properly taken care of, then that's where the delays are happening.” 

These delays are currently around two weeks, Mr Guinee says, adding that similar delays are being seen in the small number of products they import from the UK.

“That two weeks delay can potentially be a problem because if you're out of one little component, you might not be able to make the product.” 

Pre-Bexit, EI Electronics used the UK landbridge to ship to Europe.

“We are shipping Rosslare to Dunkirk now, and that's working out very well. It's the very same lead time as we had beforehand, we ship out of here on a Tuesday evening and it's delivered in Germany or Holland on a Friday.” 

“There's about a 20% extra cost involved for doing it that way but we felt that the security of our delivery was worth that.” 

“The UK is our biggest market and we always said that it would remain our biggest market. If it had been a hard Brexit there would have been tariffs and we would have taken that on the chin.” 

“If there's an extra cost in doing business with the UK, we'll take it because it is our biggest market and we can't afford to lose it.” 

Codex Beauty, which was established in 2018, may be the canary in the coal mine for how global businesses will deal with the UK in a post-Brexit world.

The bioscience-led beauty brand whose products are formulated at their manufacturing facility on Model Farm Road, Cork and then produced by Offaly-based skincare company Europharma Concepts, has made a deliberate strategy to stay away from the UK when choosing where to base its facilities.

“We were purposely staying away from the UK because we knew the chaos that was going to come at some stage,” Tracey Ryan, Master Formulator and Managing Director of Codex Beauty Europe explained.

“There's some areas where we can't, there's some fantastic suppliers that we really love working with in the UK and we want to continue our relationships with these people but it's been made very difficult.” 

Ms Ryan said businesses can tend to automatically look to the UK as a base, but knowing Brexit was on the horizon they felt they should look at what was available in Ireland first, eventually settling on Crane Logistics in Cork as its main fulfilment centre for Europe.

 Tracey Ryan Codex: 'We were purposely staying away from the UK.'

Tracey Ryan Codex: 'We were purposely staying away from the UK.'

The Tipperary native said the brand also made a conscious effort to stay away from contract manufacturers in the UK. Where it didn’t, it has seen some delays.

“We've definitely seen an impact in purchasing materials from the UK. We stockpiled before Christmas to make sure any really important materials were in house in good quantities, but it's been a nightmare.” 

“The suppliers themselves don’t even know what's going on.” 

“Our suppliers, where they have been communicating with us and trying to figure things out, we've said okay we'll continue to work with you, we'll be patient. But others, who can't give us any kind of an estimation on how things are going to work or how taxes are going to work.. we have started looking at alternative suppliers.”

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