Prepare for the expected: how Sephra Europe has adapted to leaving the EU

After overcoming the major challenges brought by the COVID-19 pandemic, Sephra Europe, along with thousands of businesses across Scotland, are now preparing for the financial strain and uncertainty of leaving the EU.

Sephra is a recognised and trusted name in commercial chocolate fondue fountains, manufacturing a range of waffle bakers, crepe makers, popcorn and doughnut equipment which is then exported globally.

With its European headquarters based in Scotland, Sephra offers a complete end to end consultative sales experience on their entire product range, through their network of distributors throughout South America, North America, Europe, Russia, Middle East and Africa and Asia.

Like many firms, Sephra has already endured the strenuous trading conditions of 2020 brought on by the pandemic. However, with the end of the transition period on the horizon, David Archer, Managing Director of Sephra Europe, and his team are fully focused on adapting and preparing for the upcoming changes.

David said: “As a business that carries out significant levels of importing and exporting within the EU, we have had to cover all areas to ensure we fully understand the challenging impact leaving the EU will have on our business. We have invested in our operations significantly to ensure we remain competitive with the EU and have absorbed a range of costs. However, there is still a lot that is unknown, such as administration costs to handle the increased shipping paperwork to the growing transportation fees, and it will be some time before we get a grip of the full expense of leaving the EU.”

As a business with significant experience of exporting goods across the world, Sephra has been able to find savings with their training costs, as the business is familiar with getting to grips with different export measures and the key certificates and paperwork required for different countries.

However, new costs associated with exporting products to the EU have already had a significant impact on the firm, and the new 8% import tariff if a free trade deal is not agreed would lead to significantly increased prices, potentially putting Sephra in a less competitive position.

As a business that carries out significant levels of importing and exporting within the EU, we have had to cover all areas to ensure we fully understand the challenging impact leaving the EU will have on our business.

David said: “The biggest threat to our business now is not knowing what our costs are going to be next year and so, we have been unable to manage customer expectations.

“Price rises are expected, and in addition to this, we have already experienced increased transport costs, delays, and a drop in customer confidence which ultimately affect the bottom line. While it is difficult in the current climate, businesses must readdress their pricing structure and ensure they are aware of any new costs that will apply at this stage and communicate the impact this will have on the end price to customers.”

When it comes to preparing for the end of the transition period, David highlights the importance of tracking and understanding the various levels and trails of new documentation which will be needed, especially when it comes to exporting and importing across the EU. He has also taken advantage of resources that include his local Chamber of Commerce who have provided him with must needed advice regarding the new the paperwork required for importing and exporting within the EU.

David said: “It is vital that businesses are beginning to think about what changes will be in place from January and understand how this will impact them on an operational level. Businesses that export to the EU need to map out their supply chain, establish where their imports and raw materials are coming from, and assess any potential tariff or customs procedures changes.”

While not knowing exactly what the trading relationship with the EU will look like is undoubtedly a nervous time for any business, being adaptable is something Sephra, and other businesses across the world, have been well practised at after this year. By engaging with partners and investing time into understanding what will be changing from the 1st of January, David and his team are in a strong position.

For up-to-date advice and information about Brexit, please visit https://www.prepareforbrexit.scot

To speak to an experienced adviser about preparing your business for leaving the EU or any other business issue, contact your nearest Business Gateway office.

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