Update on EU Exit Preparations

We are fast approaching the 31^st December 2020 and the end of the Brexit transition period when the UK will no longer be within the EU. Despite there still being uncertainty as negotiations continue, please find guidance below on how trade and regulatory arrangements will change, regardless of which deal is in place from 1^st January 2021.

Please be assured that across our business, we have taken appropriate steps to mitigate the impact of the UK leaving the EU under a ‘no deal’ scenario.

What tariffs will be in place after 31st December 2021?

If UK leaves the EU with "no-deal" from 1st January 2021, the ‘UK Global Tariff’ will replace the Common External Tariff (CET) on imported goods from EU. The UK Global Tariff will also apply any goods imported via Northern Ireland.

The UK Government has published the schedule of tariffs on EU imports to the UK, which is intended to apply from 1st January 2021, in the event of a “no-deal” Brexit.

For your reference, the link below to the UK Government website sets out tariffs that will apply from 1st January 2021. These are for guidance only and may be subject to change based on confirmation of arrangements post 31^st December.

www.gov.uk/check-tariffs-1-january-2021

When the final detail of tariffs post 31st December are confirmed, we will share these with customers. This will allow our account teams to work with you and your teams on a SKU/product review, comparing tax/tariff implications on your current range and to recommend suitable alternatives where appropriate. In the meantime, we continue to work with brand owners and suppliers to understand how they plan to minimise or mitigate changes in tariffs.

As outlined in our standard terms of trade, we will pass on in full, any tax changes including tariffs, at the appropriate time

Will product labels be affected?

Yes, however there will be different labelling rules for cider, beer, spirits and soft drinks, compared to the requirements for wine.

Beer, Spirits, Soft Drinks and Other Labelling

Post 31st December 2020 there is a requirement for the following changes to beer, spirits, soft drinks and other categories labels (excluding wine).

• A Food Business Operator (FBO) address is required to be featured on the product legal label or in the same visual field of it, within the jurisdiction of the market where the goods are to be sold.
• The UK Department for Environment, Food and Rural Affairs (Defra) have confirmed the product can carry two FBO addresses, one UK address, and one NI/EU address, which means that their inclusion meets the labelling criteria for both  UK  and EU markets, post transition period.
• Product placed in a market prior to the 31st December 2020 deadline, which is compliant with current EU requirements, is free to be sold through in that market.
• Spirits products sold in NI will need to be labelled with a UK duty stamp, and an EU/NI FBO address. Product destined for EU and NI will need to be compliant by 1st January 2021.
• The UK government have confirmed a grace period for compliance with label legislation on product placed in the UK market, until end September 2022.

We are working with closely with suppliers to ensure all products are compliant with UK and EU legislation by 1st January 2021, and the end of September 2022 respectively.

Wine Labelling

Post 31^st December 2020 there is a requirement for the following changes to wine labels.

• All bottled wine entering Great Britain (GB) imported from the EU will be required to carry a UK importer address.
• The UK government have given a grace period until the end of Sept 2022 for Great Britain, for full compliance on this requirement.
• All bottled wine entering the EU and NI from GB will be required to carry an EU importer address, where an EU producer address is not featured on the label.
• The EU have NOT granted the legislative provision for two importer address to be featured on a wine label for wines entering the EU post 31st December 2020.

We are working closely with wine suppliers to ensure compliance to the new label legislation. In the short term we have put in place an over-stickering process for any stock being exported from GB where required. 

Full details of the UK Government’s guidance on food and drink labelling changes from 1 January 2021, can be found here.

Northern Ireland

We are currently working with all UK Government agencies including HMRC and DEFRA and are aware of the requirements of the Trader Support Service and steps to ensure continuation of supply into Northern Ireland. We are also aware of the need to produce Import Declarations and potential labelling change requirements and are working on the best solution to do so. Full details of any new requirements have not been confirmed by UK Government.  Once we have these, we will finalise our position, and update you accordingly.

Other Considerations - Pallets

It is an EU requirement that all wood imported into the EU from a third country, is heat treated. The requirement for heat treated wood applies to pallets; therefore, as of the 1/1/2021 all pallets imported from GB into IE will have to be on either ISPM15 certified or plastic pallets.

The GB government will mirror this requirement during 2021 and therefore all product imported from EU into GB will also have to be on a heat-treated pallet.

To ensure availability of product across C&C's GB and IE Regions after 1/1/2021, we have put in place measures to ensure that both the GB destined stock and the IE destined stock is on ISPM15 pallets.  We will continue to communicate with our pallet provider to discuss forecasted ISPM15 requirements to ensure there is enough volume to meet demand.

What contingency plans have you put in place for a “no deal” Brexit?

We have been developing our contingency plans for a “no deal” Brexit since the vote in 2016 and have put in place, a number of measures to mitigate the impact.

• We are working closely with all brand owners that supply our extensive wholesale offering, to guarantee adequate stock levels and continuation of supply across our full range.
• We have customs-approved warehouses in the UK and Ireland. The scale and flexibility of our warehouse infrastructure and capital resources mean we are very well placed to provide continuity of supply to our customers.
• We have secured Authorised Economic Operator (AEO) Accreditation from the Irish and UK authorities. This will help reduce delays resulting from increased border customs controls. All freight forwarders used for our businesses in the UK and Ireland also have AEO accreditation.
• We will look to support customers that wish to increase their stockholding levels of our branded and wholesale products, to hold in their networks. However, this incremental demand needs to be forecast in advance, and we ask that any customer seeking this option gives us as much notice as possible.

Being part of a drinks business which owns, manufactures markets and distributes alcoholic drinks across the UK and Ireland, and operating in a regulated industry with existing customs procedures and controls, we are confident that the measures we are taking will enable us to minimise any operational business risks and importantly, to ensure continuity of service should no trade deal be in place after the 31^st December 2020.

We appreciate and value our partnership with you. If you have any questions on our Brexit plans, please contact your Account Manager in the first instance. Our best wishes for Christmas and the New Year.