Brexit: How will it affect food packaging in the EU?

It is still not clear how future trade relationships might be between Great Britain and the EU after Brexit. The current postponement to 31 October 2019 hasn't helped alleviate uncertainties, whether for the public or for businesses. Brexit without a deal is still a possibility. But what consequences would this have on the food industry and the associated packaging and process industry?

Nobody really knows in how far legal changes will affect the packaging and process industry if the United Kingdom leaves the European Union without any regulations. However, one thing is clear: The industry will have to implement new regulations, no matter whether they are marketing medication or labelling food.

Labelling

From the moment Great Britain leaves the European Union, labels on packaging must indicate the manufacturer’s addresses in the countries in which the goods are sold:

• If products that are manufactured in the EU are sold in the United Kingdom, the label must also indicate the manufacturer’s address in the UK.
• In turn every company that is based in Great Britain and sells products in the EU must have a EU address and indicate this on the label.

EORI-number

The Economic Operators’ Registration and Identification 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 EORI numbers, these will expire once Britain leaves the EU. Companies must then re-apply. 

EU organic label and EU emblem:

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

Warehouses at full capacity

Brexit may bring 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 minimise storage costs and prevent food waste. However, this also means: If deliveries are delayed or if the delivery chain is interrupted, shelves are empty within a few days. Companies who wish to prevent this from happening are thus increasing their stock.

Though Brexit has not yet arrived, here it appears to already have taken hold: According to a survey by the data analysis company GlobalData,a good three quarter of British warehouse owners have already indicated that their warehouses are at full capacity. They already benefit from Brexit: Due to high demand, storage costs increased by a good quarter in the last quarter of 2018.

Especially pharmaceutical, alcohol, tobacco and automotive companies have got a head start in storing expensive and durable products and parts. Whilst food companies can do the same with frozen goods, this is more complex when it comes to fresh goods. 

330.00 Euros for the Brexit box

However, whilst around two thirds of consumers fear price increases on the food sector, only ten percent of respondents say that they have started stocking up on products. However, demand for Brexit boxes continues to rise: The package contains tinned macaroni, pasta bolognese, sweet and sour chicken and beef and potato stew as well as a water filter and a fire starter. The box is worth around 330.00 Euros.