The British cheesemaker, who had to sell its business after incurring a £600,000 loss linked to Brexit regulations, expressed relief at a new agreement with Brussels but believes it comes four years too late.
Simon Prarell, who gained attention for highlighting the high export costs following the UK’s exit from the single market, commented that it’s nice to see “the adults are back in their rooms.” Yet, he emphasized, “That’s good news, but we may have had this from day one. It’s a shame it took a very long time. We might have had this in 2020.”
His company’s business model was abruptly affected by a hard Brexit deal ratified by Boris Johnson, which caused a swift decline in 20% of sales revenue.
The former Prime Minister opted against the EU’s Swiss deal, only agreeing on veterinary certifications for certain foods, including lean meat, chicken, and shellfish, aligning the UK with EU regulations.
A revised version of the Swiss contract, aiming to remove most hygiene and plant inspection checks, has been reintroduced, with hopes of reaching an agreement within a year.
With Brexit, even Spurrell faced hefty fees of £180 for veterinary certification on retail orders heading to the continent, even for a 35-pound cheese pack.
Initially eyeing a £1 million expansion for the growing Cheshire Cheese Company, Sparell sought to navigate new trade barriers by considering warehouse cheeses in mainland Europe.
However, the costs proved to be too high, leading him to sell to a larger business with a distribution center in the Netherlands that also exported goods to Germany.
He noted, “They were exporting to themselves, meaning a loss for the UK. They had to cover 5% corporate tax and 20% VAT for the Germans, plus transportation costs to the Dutch, cutting into margins significantly.”
Still, he said this new deal is significant for small businesses. “Our largest market, the 27 neighbors we lost, is open again. A small producer fell victim to Brexit, while bigger companies and supermarket chains managed to shoulder the costs.”
“Now we can stop fishing in this little pond and spread our net more widely again. Everyone was waiting for this to happen. But hey, thank you to the adults,” he added.
Sparell also expressed frustration, pointing out that “What the Tories seemed to care about wasn’t British businesses but rather soundbites and flashy remarks.”
In 2021, during the first year post-Brexit for his trading operations, Spurrell reported a £240,000 loss in its European wholesale and consumer sectors, projecting a hold of £350,000 the following year.
He mentioned that the partnership with Joseph Heller, a much more substantial entity, provides a strategic approach to tackle the expensive trade barriers brought on by Brexit.
“If the scale is sufficient, the cost of a single pallet of cheese can be distributed over 100 pallets, decreasing the overall costs. This will also help all EU customers to access local delivery rates,” he stated.
Sparell concluded that the deal, which was made privately, is also promising news for his team. All staff at headquarters, production, and warehouse will be retained, along with the creation of 14 additional part-time positions.
