Brexit: A memo to customers

2020 has been a year of extraordinary challenges for our industry - so much so that Brexit has almost gone under the radar (a sentence which would have been unimaginable 12 months ago). While managing the immediacy of COVID-19 has been a clear priority, our long term Brexit planning has also continued behind the scenes.

The purpose of this memo is to detail our Brexit preparedness; we hope it provides a reassuring comfort that, in a world of continued uncertainly, the extensive measures we have taken will ensure the supply of the world’s greatest beers will continue uninterrupted into the UK.

Brexit Preparedness

During the spring lockdown, James Clay and Sons completed the acquisition of Rarter Bond Limited as part of a strategic investment into our supply chain. Rarter Bond is a specialist excise bond business operating out of a 100,000sq^ft facility at Leeds Bradford Airport. The business, to be run as a sister company, was already very familiar to us, having managed our non-EU imports for many years, and is perfectly positioned to support our EU imports as we start a new chapter outside of the EU Customs Union.

Brexit will undoubtably place severe stress on supply chains in the UK. In the short-term delays are expected at ports and hauliers anticipate lorries being limited to one round trip to Europe per week not the current two. Alongside maintaining a strong working relationship with our haulier to mitigate this, Rarter Bond provides extensive storage capacity for Brexit stock building which will begin in November.

Our Brexit stock build goal is to hold an additional 4-6 weeks stock for all key lines (no mean feat as we hold the largest range of beers in the UK!)

James Clay and Sons have always considered stock as our main investment. We want you to focus on running the best business you can without the distraction of second guessing stock availability from our listed range; we hold stock so you don't have to. However, the new customs arrangement with the EU, deal or no deal, introduces more friction to the supply chain long-term and, in doing so, alters the stocking holding calculations required to keep this commitment to you; but alter it we will.

Rarter Bond also strengthens our customs & excise capabilities. It provides the platform to invest in the customs software required to clear goods into the UK with HMRC at the end of the transition period. Ensuring these systems are in house provides the best control and lowest additional costs in the long term.

Finally, our overseas brewery partners, while admittedly baffled at the Brexit decision, are being immensely supportive in our challenge to ensure consistent availability over the next 6 months. Be this brewing additional beer to cover our Brexit stock build, adjusting their paperwork processes or making changes to labelling.

Like everything to do with Brexit, we are likely to face some more unforeseen twists and turns, however I hope this memo provides you reassurance that we are well prepared to deal with them. Most importantly, we remain steadfast in our quest to bring you the world’s greatest beers reliably.

In summary:

• We have invested in Rarter Bond to increase our capacity to stock build ahead of the likely supply chain disruption caused by Brexit.

• Due to our ownership of Rarter Bond we will have the ability to clear imported stock into the UK in house.

• We will invest in our stock holding prior to the end of the year to ensure strong availability at the start of 2021.

• We are working with our brewing partners to co-ordinate beer production, paperwork, labelling etc.

All to ensure this transition is as seamless as possible for our customers and the world leading breweries that we are proud to partner with.