Brexit threatens to harm the German confectionery industry in the long term

26-Aug-2021 - Germany

The Federal Association of the German Confectionery Industry e.V. (BDSI) looks back on drastic declines in the very important export business with Great Britain after Brexit. The export turnover of the German confectionery industry with Great Britain fell by -11.8% in the 1st quarter of 2021. Around5% of the German production of chocolate, sweets, biscuits and co. depends on the British market.

The negative effects of the Brexit now threaten to harm the German confectionery industry in the long term, also due to logistical and administrative hurdles. Particularly because of the new customs requirements, many forwarders are refraining from doing business with the UK after Brexit. For example, the bureaucratic effort involved in goods registration or work visas for drivers has increased considerably. As a result, exporting is no longer worthwhile for smaller deliveries of goods. In addition, this leads to difficulties and delays in supplying the British market as well as to significantly higher logistics costs.

However, exports are an important basis for medium-sized companies in particular to be able to generate profits against the background of high trade concentration and the tough price war in Germany. "From the point of view of the German confectionery industry, it is essential after the UK's exit that the European single market is not further fragmented by special national regulations, but that harmonised regulations, particularly in the area of labelling, preserve the export opportunities of medium-sized companies," says Dr Carsten Bernoth, Chief Executive of the BDSI. "In addition, trade agreements that are suitable for SMEs should enable new value chains. However, the trade agreement between the European Union and the United Kingdom is not an ideal example of this."

Background:

Great Britain left the EU customs union and the single market on 01.01.2021. Although agreement on a trade deal was reached at the last minute, many goods will now be subject to tariffs. With an export share of over 50%, more than every second ton of German confectionery is exported. In total, around 531,105t of confectionery and snacks were exported in Q1 2021. This represents a decline in volume of -4.4% compared to the same quarter last year. Export sales fell by -3.6% compared to the 1st quarter of 2020 to around €2.04bn.

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

https://www.yumda.com/en/news/1172457/brexit-threatens-to-harm-the-german-confectionery-industry-in-the-long-term.html