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Resilience and renewal

International trade: How Ramsden International reinvented its business model after Brexit

Author: ICAEW

Published: 07 Nov 2023

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International grocery wholesaler Ramsden International endured a torrid couple of years in the wake of Brexit and the Covid-19 pandemic. However, long-term planning investing in people and expert advice have helped it come through the other side.

Grimsby’s Ramsden International has long been a poster child for export success. Since its beginnings in 1946, the speciality wholesaler has built up a successful business supplying more than 24,000 products to 650 customers, such as supermarkets and expat shops, in 130 markets worldwide. Along the way, it has picked up numerous accolades, including The Queen’s Award for Enterprise in International Trade, and in September it was named Exporter of the Year at the 2023 Food and Drink Federation Awards.

The past three years have proven extremely challenging for businesses and exporters, thanks to a potent combination of the pandemic, the Russia-Ukraine war and, of course, Brexit. Sean Ramsden, CEO of Ramsden International, says: “We had, first of all, the effects of COVID lockdowns, which caused massive disruption, both to the supply chain, but also to consumer demand. A good chunk of our turnover comes from tourist markets, and obviously, tourism didn’t exist for the best part of two years. Then, in the middle of this came Brexit. And more recently, there has been the impact of the war in Ukraine, which has had implications across the food industry. What we’re seeing now is very high levels of inflation, which makes British products uncompetitive when we’re trying to put them into markets with lower inflation, as it widens the pricing premium.”

As an export-led business, Brexit naturally meant big problems for the wholesaler. The EU-UK Trade and Cooperation Agreement (TCA) ushered in new trade relations and brought significant short-term disruption. “When it came in, Brexit created so many challenges for our business model that we could not supply goods,” states Ramsden. “Brexit came into effect, of course, on the 1 January 2021. But actually the TCA – which we only found out about on Christmas Eve – had to be ratified by each individual EU country and that didn’t happen until May [2021]. So, we had this legislative vacuum for five months, which essentially prevented all of our sales.”

Yet, with the EU accounting for some 50% of Ramsden International’s business, there was no prospect of giving up; instead, the response was to create a European subsidiary. Ramsden explains: “We’ve gone about completely reinventing our business, as far as EU sales are concerned. We created a route into Europe by opening our own subsidiary in Belgium. We have a partnership with a distribution company, where products are moved into Belgium so they can clear customs there and then be delivered onwards across Europe.”

This approach has enabled Ramsden International to keep a lot of its EU trade, but challenges remain, particularly given the administrative complexity of exporting food into Europe. “The documentation and the veterinary requirements are so onerous,” says Ramsden. “There are large parts of our range that are now uncommercial to supply and, in some cases, it’s impossible to meet the new requirements. If we were to supply anything with a fish element, for example, we need documentation that traces it back to the original fishing boat that landed the fish, which is just impossible. Products with meat or dairy in, for example, require veterinary inspections that simply make it commercially unfeasible to supply anything in small volumes, which, of course, is what our model is all about.”

Brexit has also created commercial pressures for the wholesaler, as it has had to employ nine new people to deal with the complexities of Brexit. And that, as Ramsden points out, “puts a great commercial pressure on the business, because we can’t just raise our prices. We have tried to keep our pricing and margins fairly consistent, but our cost base has increased. The silver lining is that we’ve given nine people in Grimsby new jobs, but it is at the expense of the profitability of our operations.”

Staying resilient

Now two and a half years on from the TCA’s introduction, business is once again on the up – though there is still work to do. Ramsden says: “It was a really bad year in 2021, but we managed to claw back a lot of turnover in 2022. And we’re on track to claw back even more in 2023, but we are still not back to 2019 levels.”

Several elements have contributed to Ramsden International’s resilience in the face of the storms of the past few years. First, its other international operations help to offset some of the loss of its EU business. “The European markets have been terrible, but I don’t want to be all doom and gloom. The international markets made up for some of that loss. We’re seeing great growth in many of the markets outside Europe. The Middle East is very strong for us, Asia, Africa, and the Americas, to an extent.”

Second, the company has always taken a long-term view to business planning. “I’ve always taken the view that we do what’s right to strengthen our business five to 10 years from now, rather than this current year,” details Ramsden. “That sometimes means taking some difficult decisions, but it also means that we’ve invested in our people. Having the best people is particularly important. We don’t manufacture anything, we don’t even hold stocks; we simply have 100 people who manage the messy, complicated world of food export. And the better those people are, the more successful we will be as a business.”

Finally, its finance function is an intrinsic part of Ramsden’s business management and development. “Our finance director is supported by three to four qualified accountants internally and they are a crucial part of the business. It’s very difficult to make decisions, whether they’re tactical or strategic, without good management information. Then there’s the added complexity of having a European subsidiary, which brings tax, accounting and auditing complexities that we never had before. So our accounting team is much more than just suppliers of management information and accounting data. They are partners to the business,” concludes Ramsden.

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