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Brexit planning - the end of the transition period

OUR PLANNING FOR THE END OF THE TRANSITION PERIOD (updated 26/10/20)

Now we have left the EU and with the Brexit transition period due to end on 31st December 2020, we've been continuing to review our Brexit planning. We're taking actions to protect the business we do with you, our customers, in the UK, Ireland and other European countries. Our aim is to minimise any disruption and continue to deliver our products and services to the highest possible standards. With the lack of certainty on whether an agreement will be met, we're planning for the worst, whilst hoping for the best. We've detailed our plans and want to share these with you.

OVERVIEW

The majority of product that Aspect carry is imported by the brands, whether the brand is based in the UK or in mainland Europe. The brands have a mixture of warehousing, some in the UK and some mainland Europe. We feel the following outcomes are likely to have the biggest potential impact: • Short term availability of stock with delays at the ports • The cost of import duties in the event of hard Brexit on imports into the UK and the duty that will apply on sales to Ireland and EU countries from UK based companies. Please remember that it's where the goods are delivered from that attracts the duty, not the location of the trading company • The possibility of devaluation of the pound (GBP) against the Euro (EUR) and the US dollar (USD) creating price increases. • Cost of goods increasing due to: 1. 1. Duty being applied on goods being imported into the UK and exported to Ireland and other EU countries. 2. Currency related price fluctuations Our 2021 Price List will be available as soon as possible on our website in the usual way

STOCK

There have been additional challenges for the brands, for us and for you over the last 7 months due to the Covid-19 pandemic; not only has there been dramatic changes in the volume of demand, but also unusual variations in demand for particular products, making it difficult for there to be accurate forward forecasting. However, the following measures should give an initial cushion to the immediate effects of a hard Brexit: • We’re holding increased stock, especially on the fast-moving items • The brands have between 2-4 months’ stock in their warehouses based predominantly in the UK, though some only have European warehouses • There’s goods that will already be in transit, arriving before the end of the year In the event of a hard Brexit, to what extent there will be delays at the ports is beyond our control. We are, however, working with those brands with solely European warehousing, or are importing goods direct at container level, to increase our stocks where appropriate.

INVOICING

In the event of a hard Brexit, and duty being applicable on the goods we supply customers in the remaining EU countries, we’ll be doing the following: 1. Issuing our normal invoice 2. Issuing a supplementary invoice for the duty applicable on those goods which will be payable effectively as a price increase. This is through no fault of the brands, or of your business, but simply the new way we will all need to operate DPD will be acting as the Importer of Record on our and your behalf and have arrangements in place with the various EU countries to minimise any delays on the import of goods. • Each evening, we’ll be electronically providing the details to DPD of what’s being shipped with the appropriate commodity codes, including the details of the duty payable • DPD will then electronically put those goods for clearance through customs, enabling them to be delivered to you, in theory, with no delay We’d recommend that during the first few weeks of 2021 to expect these new systems to have some initial teething issues and to please allow for some delay in deliveries. Whilst we’ll be paying DPD in the short term for the duty, it’ll ultimately be our customers’ responsibility to pay us in the same way VAT is payable.

CURRENCY

Over recent months, whilst there have been fluctuations between the GBP, EUR and the USD, they’ve been relatively stable and hopefully any concerns of a hard Brexit have already been factored in by the markets. However, there’s always the risk of further devaluation which could impact prices in Q1 2021. We should all be aware of this risk: 1. When issuing quotes 2. Being prepared to change prices at relatively short notice.

QUOTES

Please note: any quotes which are currently issued will only be valid until the end of 2020. We cannot account for any adverse currency swings, so please take care in the validity of our quotes. We cannot hold prices beyond any change dates that we’re given, and these are likely to be at short notice.

SUMMARY

None of us know if there’ll be an agreement reached by the UK and the EU but, in reality, none of us can operate in isolation, so we feel it only reasonable to take the view that ‘we’re all in the same boat'. Whilst things will be different, certainly, we’ll update this page in the coming weeks and, in the meantime, we hope that you have a strong period of trading between now and the end of year. We hope you remain safe and well.

For more information please contact us