British Plastics Federation launches Brexit guide as continued uncertainty forces contingency plans

04 Nov 2019 --- The British Plastics Federation (BPF), in partnership with Squire Patton Boggs and the Department for Business, Energy & Industrial Strategy (BEIS), has released a practical guide to help plastics companies prepare for Brexit. The guide is released on the back of a recent survey of BPF members about Brexit, which found 78 percent of companies have made contingency plans in case there is a no-deal Brexit. This is a notable increase since December 2018, when only 54 percent of companies had.

The survey found that the areas that will have the biggest impact on businesses in the case of a no-deal Brexit are: tariffs (with 61 percent saying they will have either a “high” or “fairly high” impact), border delays (with 72 percent saying they will have either a “high” or “fairly high” impact), and changes to customs and VAT procedures (with 55 percent saying they will have either a “high” or “fairly high” impact.

The EU is the UK plastics industry’s most significant trading partner, accounting for 69 percent of all trade, with nearly £15 billion (US$19.4 billion) worth of plastic and plastic products being traded between the UK and EU member states each year. When asked what they considered the best option was for their business, 4 percent of respondents wanted a no-deal Brexit, 41 percent wanted to leave with a deal and 55 percent wanted to remain in the EU.

Preparing for Brexit: Practical Guidance for the Plastics Industry is available to download and aims to ensure that plastics companies in the UK understand the key practical steps to adequately prepare for Brexit. Amongst other topics, the detailed 32-page guide covers:

• The Effect on REACH and Other Regulations on Plastic Firms;
• Rules of Origin;
• CE Marking and UK Mark;
• Plastic Recyclers and Brexit;
• Essential Actions Businesses Should Take.

“Whilst the signs suggest that the majority of firms have taken some steps to prepare for a no-deal Brexit - a result the vast majority of firms clearly want to avoid - we have released this report to provide clear, accessible guidance to ensure all bases are covered when preparing for Brexit and we urge all plastics companies to make use of it,” notes Philip Law, BPF Director General.

“Uncertainty is never good for business”
Barry Turner, BPF Director for Plastic and Flexible Packaging tells PackagingInsights that the uncertainty around Brexit has already had a detrimental effect on the UK plastics packaging industry.

“This uncertainty around Brexit, in terms of whether it is going to be a ‘hard Brexit’ or ‘soft Brexit’ has been most concerning to a lot of our industry members and uncertainty is never good for business. Investment decisions get deferred, people are unsure whether or not they will be able to supply stocks and supply of raw materials, they are unsure how it is going to affect their exports, so at this moment in time there is an awful lot of nervousness,” Turner explains.

“Certainly if we have a hard Brexit it will have an adverse impact on not just the plastics sector but lots of sectors across the packaging industry,” he adds.

No-deal Brexit: Avoid at all costs
UK packaging expert Neil Farmer believes that the effects of a no-deal Brexit on the UK packaging industry could be severe. He envisages the cost of imported raw materials rising, the need for renegotiation of supply contracts, delays in goods arriving into UK factories from crowded ports and frustrated customers left waiting for delayed deliveries.

“These delays are also likely to impact customers’ product manufacturing operations,” adds Richard Coles Director of Emagine Packaging. “For example, food and agricultural products worth over £47 billion (US$60.7 billion) imported to the UK with circa 71 percent from the EU.”

“It is logical to conclude that, in the event of a no-deal Brexit, there might be a need for shelf-life enhancement and extensions [due to delayed delivery times],” Farmer says.

According to Coles, short shelf-life food such as fresh, chilled produce, chilled dairy products, juice/juice drinks and many other perishables, including fresh chilled fish and seafood, meat and poultry, will be the worst affected.

“Delays will also be of concern to other sectors, particularly those delivering time-temperature sensitive products, such as pharmaceutical drugs and vaccines,” Coles says.

Coles sees the plastics industry being particularly hard hit in the event of a no-deal Brexit because it is one of the UK’s top ten imports and exports with continued strong market growth over the past decade.

BPF statistics support this concern, with the organization estimating that the UK’s failure to secure a trade deal with the EU would result in a dramatic £540 million (US$698 million) increase to the cost of plastics and plastic product imports and a £340 million (US$439 million) increase to the cost of exports.

By Joshua Poole

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