Kapiteyn BV is a company specialized in the export of flower bulbs. After packing the flower bulbs, their B2B sales go across the globe to retailers, international supermarket chains, home improvement centres and department stores. Kapiteyn BV ships approximately 140 million flower bulbs per year in total, of which 37 million flower bulbs per year are being shipped to the UK.
CATTS interviewed Bas van der Velden, managing director, and Henk Kreek, supply chain manager, who provided their view from the perspective of an EU company exporting to the UK. We are happy to share this Case Study on how they prepared themselves for the changes that were upcoming prior to Brexit and their experience post-Brexit.
Before Brexit, Kapiteyn BV was worried about the new rules for them as a company that mainly exports products with phytosanitary requirements. They have many customers in the UK and need to deliver the packed bulbs as soon as possible after shipping from their location in Breezand, the Netherlands. When exporting to the UK, they need to serve every customer individually. Their biggest challenges were the general uncertainty across the industry and the late clarification from UK government about the applicable phytosanitary rules in the UK for flower bulbs. Due to the high workload for UK officials, Kapiteyn experienced late replies when asking about, for example, VAT applications. The large amount of customer requests right before Brexit was another reason of concern for exporting to the UK. Would everything be in place in time, and would there be no restrictions to export to the UK?
When Brexit was announced, they hoped that their customers would support them and prepare for the expected changes as well. The reality was that Kapiteyn’s customers expected that Kapiteyn as the supplier would relieve them of any additional work that needed to be done.
To prepare themselves for exporting to the UK after Brexit, Kapiteyn BV registered a local UK entity in order to import into the UK centrally and then forward those shipments to the individual customers in the UK. They hired CATTS as an external partner to help them with setting up and maintaining their new UK entity and to assist them in understanding the rules for exporting flower bulbs to the UK. A local UK accountant was required to assist them with the financial administration for the UK entity. Kapiteyn BV did not hire any staff to handle the expected workload for the UK after Brexit.
Bas, Henk and their team collected as much information as possible before the 31st of December 2020, but still getting concrete and really understanding every detail was difficult because of the lack of available information before Brexit. Furthermore, they had multiple meetings with the industry association and joined webinars about Brexit. Kapiteyn BV met with their carrier to understand what kind of documents are needed to send the packed flower bulbs as quick and efficient as possible to the UK.
When Brexit was finally live, they worked together with their carrier in early January 2021 to test the water. First by sending smaller test shipment to one customer in the UK to see if the documentation with the shipment that they had in place was correct. That test ran smoothly, and the experience was useful for future shipments.
Bas and Henk expected more delays at the border due to documentation checks or even physical checks, especially because of their higher risk phytosanitary products. In reality there have been no noteworthy delays for Kapiteyn BV. They were not physically inspected by UK Customs in the past 3 months, not on location, nor at the border. There was only a small delay when they were exporting via the UK to the Channel Islands Jersey and Guernsey. Shipments to Northern Ireland did not have any delays when they were exporting, only some extra paperwork was needed before shipping the products.
Compared to the situation prior to Brexit there is some additional work involved in the process of shipping packed bulbs to the UK. Operationally the changes are minimal, an example of such change is that Kapiteyn at this moment needs to use a heat-treated pallet, which was not required before. The extra paperwork involved, especially phytosanitary documents that need to be created at least 24 hours in advance, requires some additional effort.
Bas and Henk are not aware of companies that deliver B2B in their industry that stopped shipping to customers in the UK after Brexit. They do know about companies that deliver directly to consumers that stopped shipping to the UK because of Brexit. The amount of paperwork was too much to proceed delivering small amounts of packed flower bulbs directly to individual consumers. For Kapiteyn, Brexit is no reason to stop doing business with UK companies, especially not after the experience from the past couple of months.
Kapiteyn does not see any decrease in demand of flower bulbs in the UK, the biggest advantage that Kapiteyn had was the fact that they already agreed on contracts with their customers before the 31st of December 2020. Right now, the trend for the demand in flower bulbs in the UK looks promising to Kapiteyn. They do not expect that their growth in the UK will be less because of Brexit. They do believe that there is a bigger opportunity for companies that already have all the processes and approvals in place to handle export shipments to the UK compared to companies that are less organized.
In the end, Kapiteyn thinks exporting of flower bulbs to the UK went better than expected, they do not exactly know how the new bulb season will look for Kapiteyn. They are expecting more physical checks, either on location or at the border, also connected to phytosanitary checks. Probably some rules will change as well in the next few months. Kapiteyn is not afraid of these new rules, they are well prepared and are positive for the start of the new season in July 2021.