In The Case Of No Deal Brexit
As many of you are aware, the latest deadline of the 31st of October is approaching and assuming that we don’t get another extension it’s looking like a no deal could happen. As a company we are openly against a no deal and despite our hope for an orderly Brexit we have to be prepared for the worst, so here are our current plans for if we leave the EU without a deal.
Based off our experiences with couriers surrounding Brexit, we are likely to change from Parcelforce to DPD Local. DPD in general have prepared by opening up their own customs facilities throughout Europe to help streamline the new process of shipping through packages. As for fees we are unsure how much shipping costs would rise post Brexit, but we can guarantee that shipping will become more expensive and may take longer to receive packages.
You may remember that we were actually using DPD a while ago and switched to Parcelforce after our local depot became unreliable; well DPD Local is actually a separate courier company to DPD (though they are affiliated) and after speaking to them directly about our concerns we are confident that our previous issues won’t be problems with them.
We believe we’ve figured out what our customs fees will be when trading to the EU under WTO rules. The added cost to our 5 day bags will likely be as follows:
KetoGenesis Standard/Premium: €0.59
KetoGenesis Vegan/Hypoallergenic: €0.00
GlycoGenesis Standard/Premium: €1.55
GlycoGenesis Vegan: €0.21
You can probably figure out that they’re all a little different; this is because tariffs for food items vary depending on the macros and how much of certain ingredients they contain. Many tariffs are also done by weight, which is why the non-vegan Glycos are the only item to have a predicted tariff of more than €1. Samples will also have different tariffs which we are yet to crunch the numbers for.
What we are likely to do is increase our prices early November. We haven’t actually increased any of our prices since we founded despite increased costs in ingredients purely because we’ve been able to negate that cost increase by buying in bigger bulk; but considering ingredients costs are also going to be increasing due to Brexit, we will have no choice but to up our prices, including for our UK customers.
We’re going to keep crunching the numbers and work out the costs for all possible Brexit outcomes as well as remaining in the EU and will adjust our prices accordingly. What we may have to do eventually is open an EU store that is separate to our UK one if we find that a no deal dramatically increases costs to send to Europe, but hasn’t affected our UK costs significantly so we can offer a more fair price to our UK customers. We really don’t want to have to do this as we believe our products should cost the same for everyone, but it may be the best option in the worst case scenario.
If there is one silver lining to any of this it is that we’re seriously considering selling to other areas outside of the EU such as Australia, Asia, and maybe some locations in the Americas. This will be heavily dependent on how expensive shipping would be, and the countries own rules for food. A good example of this is the USA. In order to sell food items you need to be approved by the FDA. In order to be approved by the FDA you need to pay for an inspector to be flown over to your facility and pay for their expenses there. We don’t currently believe we’ll have enough business in the US to deem this a cost effective option, especially as if we ever do move to another facility we will need to be re-inspected. If you do live in a non EU country and are interested in our products, let us know so we can contact our courier and get some shipping prices for you.
In conclusion, this is our current Brexit plan; a slight price increase to balance out the extra fees, inflation and cost of ingredients as well as changing courier. We’re still hoping that either another extension will go ahead, or even another referendum and possibly rescinding article 50 as from our experiences nothing economically beneficial is likely to come out of Brexit for many decades. No matter what happens we’re going to work hard to stay on top of everything and try to absorb as much of the blow ourselves.