How Will Brexit Affect the Packaging and Processing Industries?

Brexit

Uncertainties revolving around Brexit are still a reality, as a no-deal scenario remains possible. The current postponement to 31 October 2019 has not helped alleviate uncertainties. But what consequences would this have on the food industry and the associated packaging and processing industries?

In a recent article, Interpack organizers discuss the challenges that will affect the industry in the eventuality that the UK leaves the EU without any regulations. A certainty remains – the industry will have to implement new regulations when it comes to food.

From the moment the UK leaves the EU, labels on packaging must indicate the manufacturer’s addresses in the countries in which the goods are sold. For instance, if products that are manufactured in the EU are sold in the UK, the label must also indicate the manufacturer’s address in the UK. Alternatively, every company that is based in the UK and sell products in the EU must have an EU address and indicate this on the label.

The Economic Operators’ Registration and Identification (EORI) number is a European customs number that identifies economic agents in the movement of goods. Thanks to automation, this number can help alleviate customs clearances within the EU. However, if British companies already have an EORI number, these will expire once Britain leaves the EU. Companies must then re-apply.

Furthermore, both the organic label, valid throughout Europe, and the EU emblem will no longer be permitted for use on British organic and other affected products. Exceptions may be made by an equivalence agreement between the UK and the EU that is based on the recognition of the respective standards.

According to the article, Brexit may bring some advantages for storing goods for daily use. Companies in the food and beverage sector are planning ahead. Many large British retailers such as Tesco use just-in-time production to minimize storage costs and prevent food waste. However, this also means that if deliveries are delayed or if the delivery chain is interrupted, shelves are empty with a few days. Companies who wish to prevent this from happening are thus increasing their stock.

A survey by research company GlobalData revealed a good three quarters of British warehouse owners have already indicated their warehouses are at full capacity. Thus, they already benefit from Brexit, as due to high demand, storage costs increased by a good quarter in the last quarter of 2018.

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