With growth in the drinks industry expected to continue, established companies are thriving while craft beer and creative gins are increasing their market share. Consumers flock in numbers to try the endless options available from unique production.

From existing large scale operations to up-and-coming brewers and distillers, Brexit could prove to be an obstacle for growing businesses. Successful trade negotiations with the EU will be vital to avoid a ‘no deal’ scenario. While much of this is outwith a company’s control, there is still opportunity to plan carefully and adopt the most efficient customs procedures.

Companies could be forced to trade with the EU as a third country, subject to declarations in and out of the UK. The UK would have to forfeit EU commercial policy benefits and preferential arrangements bringing additional costs and time management. The movement of excise goods, spirits, beer and malt, could become more complicated. To and from the EU, new cross border customs procedures could result in increased costs and potential delays for businesses. As a result, the EU will expect the UK to adopt efficient control measures to supervise cross-border movements. We therefore cannot underestimate the dangers or overestimate our ability to do this successfully.

The Government have recently initiated the release of a series of technical notices providing businesses with scenario based guidance: ‘Trading with the EU if there’s no Brexit deal’.

Two key areas to consider for international trade operations are:

  • Authorised Economic Operator (AEO) status

AEO accreditation is becoming more prevalent commercially and with customs authorities. Having AEO approval may well become the route for frictionless trade. There are many benefits that come with AEO status including simplified declaration procedures, guarantee waivers/reduction and EU-wide recognition. As subject experts and ex-customs officers, we are trained in AEOC simplifications and AEOS security and safety to help brewing & distilling businesses prepare for a smooth and successful application.

  • Customs/excise warehousing procedure

Excise warehouse approval and warehousekeeper authorisation allows you to store spirit production until the duty point is passed, normally when released for sale. A customs warehouse enables suspension of import VAT and duty payments until released to free circulation. Both options have a clear cash flow benefit. Having an approved warehouse ensures efficient processes are adhered to and that there is effective maintenance of records. Waste can be accounted for and reclaimed with this facility.

For more information regarding the customs implications for brewers and distillers and guidance on what you can do to prepare for Brexit, contact:

Veronica Donnelly

VAT Partner

0141 886 6644


The information in this blog should not be regarded as financial advice.  This is based on our understanding in August 2018. Laws and tax rules may change in the future.