Company

WIKA UK - June 2020 - Updated Brexit Plan - "No Deal Scenario"

The UK officially left the EU on the 31st January 2020 and entered into a transition period during which we will continue to abide by the rules of the EU whilst negotiating a new trade agreement with our largest trading partner. 

This transition period ends on the 31st of December 2020 and the UK Government have confirmed that there will be no extension to this, despite the current COVID-19 pandemic situation. 

If a new deal cannot be agreed by the end of 2020, then from the 1st of January 2021, the UK and EU will revert to trading on WTO rules and the UK will essentially be a third party country to the EU, as is the US and China for example. 

If this ‘NO DEAL’ arrangement does come to fruition, then any goods arriving from the EU or leaving for the EU, will be subject to the normal customs processes already in place for our other third party trading partners. 

The UK Government have recently confirmed that the move to WTO rules and the imposing of import checks on goods from the EU, will be phased in during 2021 rather than full implementation from the 1st of January 2021. This will help UK businesses deal with the additional work involved with importing of goods, as well as ease delays at UK ports for a period. 

WIKA UK continue to monitor the BREXIT situation closely and remain prepared with measures to counteract the impact of this situation, ensuring a continued reliable supply of our products after 31st December 2020. 

The key actions we have taken and are constantly reviewing are detailed below.

  • We have identified our key fast moving product lines which are critical to our customers businesses and are -
    - Encouraging customers to hold their own maximum stock levels.
    - Increasing our buffer stocks in the UK to cover any period of custom delays.
    - Moving an element of already agreed buffer stocks held at our EU factories to
      the UK.
  • We are working with our key suppliers to ensure a ramp up in production to cover any additional demand for stock.
  • We are encouraging our customers to review their stock levels and ensure orders are placed ahead of normal timing to protect against delays.
  • For project work, our team will review all current orders with a view to obtaining early clarification of specifications and / or quantities to ensure these are ordered ahead of time.
  • We have spoken to our customer base detailing our current approach to Brexit and to detail our current lead times, estimated customs delays, and to ask them to consider their forecasted needs and stocking any specific high risk items for them and their customers.
  • We are continuing discussions with our key Freight Forwarders to mitigate the risk of customs delays, including reviewing alternative routes into the UK, preparations for increase in customs administration and potential AEO certification.
  • We are continuing to review the political landscape, consult with customers and industry peers as the best way to mitigate the negative effects of Brexit.
  • We are constantly updating our analysis of the financial impact of a no deal Brexit, including increased duty and tariffs, increased cost of freight and customs administration, foreign exchange fluctuations and are looking at ways to mitigate this to ensure minimal impact on our customers.
  • We are also monitoring travel issues for employees during and after a no deal Brexit.

We encourage any of our trading partners and related companies to make contact with us if they have any direct concerns.

Jonathan Peaurt
Managing Director