Will they, won’t they? The EU has said the Prime Minister’s deal must be approved by MPs by the end of this week, if Brexit is to be delayed until May 22nd. Either way, in the wake of likely upcoming Brexit changes, food, beverage and pharmaceutical brands—among others—will be left with a surplus of thousands of packages with unusable labels. This means that consumer brands will have to quickly print and ship many new packages, facing regulatory and bureaucratic challenges along the way. Already, U.K. supermarkets are stockpiling food and beverage items in case of a logjam at the border, Reuters reports.
How Quickly these Changes Take Place Depends on Whether Brexit is “Soft” or “Hard”
A “soft” Brexit, for example, would give CPG companies more time to alter their packages, whereas a “hard” Brexit would make immediate changes necessary. Currently, political turmoil in the U.K. has left both U.K. and EU officials unsure what deal will be in place at the end of March, a troubling detail for everyone in the region. The BBC reports that EU officials warned that risk of a “disorderly” Brexit is high.
If there’s no deal struck by March 29, the U.K. will likely start using World Trade Organization rules instead of EU trade rules, Reuters reports. Under post-Brexit rules, brands will have to pay tariffs, check goods and complete paperwork for items imported and exported between the U.K. and EU, none of which has to be done under EU rules.
In February—nearly three years after a majority of U.K. citizens voted in a referendum to leave the EU—the Packaging Federation and other industry bodies urged the British government to rethink its consultations and technical notices that would mean vast legal and regulatory changes in the wake of Brexit. Dick Searle, chief executive of the Packaging Federation, told Packaging News that businesses—the food and drink sector in particular—will be stretched thin because of Brexit.
“It is business that drives the economy but I’m not sure that politicians understand that,” Searle says. “Businesses will have to go through hundreds of pages of consultation.”
If no deal is struck, CPG companies will have to think and act quickly on packaging changes. For example, items exported from the U.K. to EU countries will no longer be able carry the phrase “made in the EU” on the package. Instead, any food business operator must include an EU address for EU importer on your packaging or food label. Ian Wright, chief executive of the Foodservice Packaging Association, said at the Environment Seminar that brands will also need to obtain an EORI number to import or export items from the EU, Packaging News reports. Wright told the crowd that Brexit is the biggest threat the food industry has faced since 1945.
Andy Barnetson, director of the Confederation of Paper Industries, told Packaging News that if no deal is struck, it will cost “vast amounts of money” for its members. Members of CPI, in particular, will suffer setbacks in packaging materials, but also the chemicals and adhesives needed to bind the label to the package, Barnetson says.
What Brexit Means for Pharma Companies
The pharmaceutical industry will also face major challenges if the U.K. leaves the EU. European Pharmaceutical Magazine reports that the European Medicines Agency, which authorizes the marketing of medical products across Europe, will move offices from London to the Netherlands because of Brexit. Along the way, the EMA will lose members and staff, likely delaying what can be approved across both the EU and the U.K. This delay could cause economic problems across the region, as the U.K. exports £11.9 billion worth of medicinal products to the EU.
In addition, most pharmaceutical companies outsource artwork updates for their products, and as of February 2019, most pharmaceutical companies in the region were struggling to get their artwork aligned by the EU’s serialization deadline, according to Sirius. This raises the question of whether most companies will be able to have the artwork they need in time to comply with new regulations.
How to Prepare for Packaging Changes as Brexit Looms
Brexit will continue to be in the headlines for some time; with, many twists and turns still to come. If companies in the region don’t want to be left scrambling amid the chaos of Brexit’s regulatory changes, the best solution is to adopt packaging management software.
Three Ways Artwork Management Software Will Help
- Comply to the new guidelines and standards, quickly
- Collaborate with third-party agencies and suppliers on label updates
- Avoid packaging and shipping delays; ensuring your products stay on the shelf
Packaging and artwork management software allows brands to efficiently change labels and artwork quickly, enabling them to increase products’ speed-to-market. With this software, brands can quickly make packaging changes and ensure consumers have their products, whether the U.K. stays or goes.