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Direct to Consumer Trading Post Brexit

14th May 2021 - News

A problem needing solved, and I hope LinkedIn might hold the answer?

I have been working in e-commerce for many years. Having designed, developed and owned an online shop in the early 2000’s selling Chang Beer online. More recently helping to create the hugely successful e-commerce platform for The Macallan and Highland Park.

I now run a small independent bottling business in Scotland and direct to consumer was key for us well before the pandemic. Being able to offer that service is good for our small business because it allows us to build a relationship with our customer but also retain more profit. That is critical after a year of no financial aid and at a time when the cost of whisky casks is being hyper inflated by profiteering cask investment companies.

What has been a double blow over the last year has been Brexit. Don’t groan, this is not a politically motivated post but one to raise awareness of the difficulties businesses and customers currently face. The reality is that the UK makes up the majority of our online sales, but we were developing and increasing our customers across Europe. The key areas were Scandinavia, Germany, France and Eastern Europe.

Now, due to the new and unclear paperwork requirements caused by our departure from the EU, we and many others have had to stop shipping orders to our customers in those countries, forcing our customers to find new outlets.

The hope is that this will improve but there are no signs of it happening in the near future. DPD just announced to our fulfilment partner that they will no longer ship alcohol to Europe and DHL can be three times the price. If a bottle of whisky is shipped to a customer in the EU and is returned, it can cost us as much as £55 in fees. This is not sustainable.

The larger whisky companies who offer Direct to Consumer shopping are now investing in dispatch hubs in the EU, commonly Germany, to allow them to continue to offer that service. That is perfectly understandable to maintain the customer relationships that take years to develop. The sad outcome of this change is the loss of investment to the existing supporting infrastructure that can often mean hundreds or thousands of jobs in Scotland.

As a small business bottling and selling whisky, we push to use as many Scottish and UK suppliers as possible. We focus on using local talent such as our wonderful staff, photographers, designers, illustrators, developers, social media, accountants, box manufacturers, copywriters, SEO support, warehouses and on it goes. The wonderful aspect of Scotch whisky is the economic “rings in the pond” that are created by its existence. It has been a hard year in so many ways, but by nurturing our customer relationships at home and abroad we can succeed if we can carry on clearing the hurdles put in our way.

The question for you is, do you know of a way to make this work under the current state of play? I’d welcome any suggestions.