Updated 8th December 2020
Dear Valued Customer,
I would like to advise you that Banner has a long established 'Brexit Task Force' who are responsible for reviewing the latest government updates and guidance each week. This team of people are helping us take all reasonable and sensible steps to mitigate the potential impacts to all stakeholders of this evolving situation.
The team will document details on this Brexit web page to share the guidance that Banner can give.
Please check on this site regularly for news and updates. For any questions or queries please contact your Banner account manager.
We have identified that the primary risks are as follows:
(1) Supply Chain Delays
It is likely that the import arrangements for goods from the EU to Great Britain (England, Scotland and Wales) will be impacted at the end of the transition period. This could mean that disruption for supply chains becomes a more tangible risk, but Banner is prepared and ready to adapt to new processes and activities to smooth the transition.
New Customs Arrangements
We have been working through the key challenges and assessing how the rules for imports between the EU and GB may change after the transition period. The government has introduced a new staged approach to imports from the EU as of January 2021, which will apply both in a deal or no deal scenario, with the intention of facilitating the smooth flow of goods.
From January 2021:
• The import of standard goods will be covered by basic customs requirements, such as keeping sufficient records of imported goods. Any physical checks will be conducted at the point of destination until July 2021. Banner works with both experienced freight forwarders and supply chain partners, who are prepared for these requirements.
• Our freight forwarders and supply chain partners are preparing for the introduction of the goods Vehicle Movement Service (GVMS), which will be introduced from January. The GVMS will most likely work on a ‘pre-lodgement’ model, where goods arriving at ports will have already made a customs declaration. The GVMS will be in place fully by July 2021 to facilitate smooth movement of goods.
• We have made all necessary arrangements to account for and pay VAT on imported goods. We understand that there will be up to six months to complete the relevant customs declarations. While tariffs may be payable on certain goods that we supply, the actual payment can be deferred until the customs declaration has been made, allowing these activities to run in parallel and reducing the risk of delays.
From July 2021:
• Importers moving any goods will have to make full customs declarations at the point of importation and pay relevant tariffs.
• The GVMS will be fully in place for all imports and transit movements at those border locations that have chosen to introduce it.
After July, the trading conditions under which we will operate depends on the outcome of the negotiations with the EU. But as the UK government has put the above measures for EU imports in place unilaterally, they will apply in both a “Deal” and a “No Deal” scenario, reducing the risk of supply disruption.
The only products that Banner imports directly are private label lines from the Far East. The imports of our private label products from Far East factories come into the UK via Southampton or Felixstowe. The intake at these ports is 95%+ deep sea vessels from outside the EU, so any disruption should be very limited. There will be no changes to the customs procedure for orders coming from outside the EU and our freight forwarder is confident that we will not see material delays due to Brexit.
With regards to other products, Banner’s Merchandising team has been working with our vendors to identify possible risks to supply and mitigate them wherever possible. Banner typically holds one month’s stock on hand, which will mitigate the risk of delays in supply and – as part of the EVO Group – we are planning to buy an additional £5m of stock by the end of this year. This extra stock cover will be distributed across the Banner locations in Normanton, Basingstoke and Newtonards in Northern Ireland. In Newtonards specifically, we are increasing our stock depth on the most critical products and have already actioned a plan to deepen our stock cover before the end of 2020.
We also have immediate access to the stockholding of VOW Wholesale, our sister company within the EVO Group and the largest wholesaler of office products in the UK. Our integrated Group systems allow us to supply VOW stock for consolidated next day delivery, via our Truline delivery fleet. This is a unique capability within our sector.
(2) Cost Increases
It is possible that the value of Sterling will fall following Brexit, which would make imports of both raw materials and finished products more expensive. It is also possible that tariffs will be payable on some imported goods.
As one of the largest re-sellers of office products in the UK, Banner is an important customer to most of its suppliers. We will continue to leverage our purchasing power as much as possible, to secure the best possible prices.
Nonetheless, it is possible that Banner will be forced to take significant cost increases as a result of Brexit, that are wholly beyond our control and that we cannot avoid or absorb. If this occurs, we will communicate with our customers openly and honestly; and our commitment is that we will never seek to pass on any increases that we have not taken ourselves.
(3) Staff Shortages
Banner employs some EU citizens within its operations. The large majority of them hold permanent positions, after we acted earlier this year to mitigate the risk of staff choosing to leave the UK after Brexit was confirmed. We believe that most – if not all – will continue to work for us into 2021 and beyond.
(4) Irish Border
Banner operates a warehouse in Belfast that was previously partly supplied by the VOW warehouse in Dublin. To mitigate the potential risk posed by the border question, we have switched the large majority of this supply to Banner warehouses in England.
Clearly other risks may emerge as the precise form of our exit from the EU becomes clearer. In all events, however, Banner is committed to communicating all issues that arise to its customers as soon as they emerge, openly and honestly, and mitigating any impacts on service and/or pricing as much as reasonably possible.
Banner Group Limited