Businesses lose millions as export costs soar after Brexit

Some food and drink companies have seen their income shrink by as much as half.

Businesses lose millions as export costs soar after Brexit STV News
Brexit: Gin distiller Walter Micklethwait has suffered a double whammy.

Scottish businesses are losing millions of pounds because of the soaring cost of exporting to the EU in the wake of Brexit.

Some food and drink companies have seen their income shrink by as much as half.

VAT and other additional costs for transporting some produce has doubled since the New Year.

Hauliers have also been hit because they have had little option but to return many deliveries.

Scores of small distilleries have sprung up across Scotland in recent years. Many have secured lucrative orders from within the EU but Brexit has intervened.

New rules, VAT and duty charges on arrival have meant hefty new surcharges, often doubling the cost of alcohol products.

On Inshriach Estate near Aviemore, gin distiller Walter Micklethwait, has suffered a double whammy.

He also has holiday accommodation which has been idle due to the Covid lockdown.

He said: “Since New Year, not only has the cost of the gin delivery gone up to £22 for an individual bottle but when it lands the purchaser is now hit with VAT and duty in their country. 

“So, a bottle of gin that might have cost them £35 plus delivery is now looking at costing £75 when it lands.”

Some hauliers have reluctantly suspended shipments of alcohol due to confusion over the paperwork, and having to make claims for VAT and duty from the purchaser.

James Withers of the promoter Scotland Food and Drink said: “It’s been a horrendous first few weeks since the end of the transition period for Scotland’s food and drink exporters.

“We sell about £1.2bn of Scottish food to the European market each year and, frankly, a lot of the future of that is now at stake unless we can drive some real solutions to make trade a lot smoother than it’s been over the last few weeks.”

A spokeswoman for the UK Government said it pledged £1m last year to showcase Scottish food and drink exports and “constructively engages with industry bodies”.

She added that the government was “well positioned to benefit from expansive trade deals” it is striking.

Martin Reid of the Road Haulage Association Scotland said: “There are so many problems in getting the goods to the market that the market will look elsewhere.

“Hard established long business relationships that have been there for many years are now at risk over paperwork, delay and extra cost.”