The transition might have been calmer than many expected, but food importers say costs and waiting times for documentation remain higher than they were two months ago, as hope remains that trade procedures will improve.
BusinessNow.mt reached out to some of the country’s top food importers to see whether the UK’s exit from the European Union left as deep an impact as was feared.
Nikol Sammut, Commercial Manager at Alf Mizzi & Sons Marketing Group (AMSM), says that things have improved since the first few weeks, when, he says, many authorities in the UK were themselves unsure of what needed to be done.
“Our transporters were sent round in circles,” he says, describing the last two months as “pretty turbulent”.
Documentation, however, remains an issue, with most UK exporters refusing to issue export documentation. Transportation companies are therefore picking up the slack – at a cost.
Mr Sammut says that while transport costs did not increase per se, the additional service of preparing documentation costs around £100 per order, while the transport time has increased significantly thanks to the “many more checks and obstacles en route out of the UK”, adding that local customs clearance also takes longer.
Such additional costs are felt across the industry. John Bonello Ghio, Head of Food Business at Farsons Group, explains how forwarders are adding additional charges for delays in collection of consignments while waiting for suppliers to produce the required documentation.
He says that although “things are beginning to settle”, having the correct paperwork remains an issue with many suppliers, particularly the large multinational suppliers who are more bureaucratic and so take longer to update their systems.
Mr Bonello Ghio places some of the blame at the feet of these suppliers for not being well prepared to tackle the new export requirements, although he acknowledges that the situation was not easy “given the eleventh-hour deal”.
Some of it must however be apportioned locally, too, as “we do not have clear direction on new required documentation for the various food items”.
“We have been faced with added procedures, costs and delays on various shipments received. Clearance is now also required from port health, border inspection post, and we must also cover the cost for random customs inspections.”
Farsons Group CEO Norman Aquilina says that, keeping in mind that the UK is one of Malta’s major trading partners, “Brexit is a new reality we have to deal with”.
He points out that Malta does not only import from the UK – local exports have been similarly impacted by the supply chain and logistical hurdles.
“It is partly due to the temporary confusion and uncertainty caused by this new situation, but ultimately there are the lasting consequences of border controls and changes in the rules of origin,” he says.
“Generally speaking, today more than ever before, businesses are striving to strengthen their competitive advantage. One way of achieving this is through simplification, but the truth is that simplification can be a complicated business and Brexit has certainly added to these complexities.”
“As the dust is beginning to settle, we are already seeing improvements being made and everyone is clearer of what is required, so I am particularly hopeful that the initial teething problems will be ironed out,” he says.
However, the impact of Brexit remains “rather significant”, and is expected to change future trade flows.
Mr Sammut believes that the ones most impacted by the new barriers in place are British exporters, and as a result he is confident that many of the new procedures put in place following Brexit will be tweaked or removed completely over the coming months.
Meanwhile, Mr Bonello Ghio says that, “where possible”, Farsons Group is shifting supplies to facilities located on the continent. “In the long run, this would translate to reduced trade with the UK.”
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