With Brexit delayed once again thanks to political unrest, the U.K. is now due to exit the European Union (EU) on October 31, 2019. Despite the delay, businesses across all industries continue to anticipate insecure trade conditions when it happens and are planning measures to protect themselves and their customers in the event of extreme Brexit scenarios.
What can businesses do to protect themselves against Brexit instability?
There are many ways that Brexit might impact pet food manufacturers’ ability to trade outside of the U.K. and various strategies they can use to protect their trading: for example, things like increasing U.K.-held stock, updating their customs technology, maintaining a healthy cash flow, examining their supply chain and applying for Authorized Economic Operator (AEO) status.
AEO status is an "internationally recognized quality mark" that signifies a secure role in the international supply chain, with efficient customs controls that meet EU standards. It’s not compulsory for businesses trading outside of the U.K. but it makes certain customs procedures quicker, meaning that businesses with AEO status should find the risk of border delays after Brexit drastically reduced.
Keeping trade moving post-Brexit
While it won’t magically make post-Brexit trade an easy process for U.K. pet food businesses, achieving AEO status will definitely deliver a faster customs process with noticeably reduced costs. One business that has already taken advantage of this is Trouw Nutrition GB (TNGB).
“Ensuring the security of its supply chain and promoting the health and well-being of companion animals is central to Trouw Nutrition’s core values,” said Rob Binnekamp, general manager of TNGB. “Following events such as 9/11, the AEO scheme was introduced by the EU to secure the international supply chain.”
There are two types of AEO certification: for customs simplification (AEOC), security and safety (AEOS) or Authorised Economic Operator – Full (AEOF), a combination of both.
“AEOF is the highest level of accreditation possible under the EU’s AEO standard and is globally recognized,” said Binnekamp. “Achieving this standard demonstrates to the pet food industry that TNGB is serious in its stated commitment to the companies we serve and to the protection of their brands. Brexit threatens to disrupt existing supply lines and lead times for ingredients into TNGB and blended products to our customers across Europe.”
By gaining AEOF accreditation, according to Binnekamp, TNGB has secured the right for goods to be fast-tracked through customs clearance in the event of a Hard Brexit. In addition, should any goods require inspection, they will be given priority over others. Having this accreditation, according to the company, will assist TNGB in maintaining its quality of service to customers by limiting the risk of supply disruption in an increasingly difficult trading environment.