Past event

BPCC members explain how to export Polish food to the UK

During a conference on 17 November 2015 organised by the BPCC and the Lublin Voivodship Marshal’s Office, chamber members had the chance to present a comprehensive range of solutions for transporting, marketing and getting paid for products and services to the British market to food producers from the region.

Event partners



The British consumer is wealthy but is also very demanding. The market is highly differentiated. The wealthier, more conscious part of the market is looking for new taste sensations and healthy food - while others seek lower prices regardless of the origin – or the healthiness – of the product. The big challenge is knowing how to work in the UK market, how to establish cooperation with retailers, importers and distributors, and how to convince the British consumer to buy Polish food. The problems associated with the certification, foreign exchange rates, logistics, translation and concluding contracts between two different legal systems were explained by experienced practitioners.

The Russian market is becoming increasingly less important for the Polish economy. Exports have fallen by a third since the Ukrainian crisis began in early 2014. This is a result both of sanctions, which the Kremlin has imposed on many categories of Polish goods including food, and the economic crisis which has hit Russia. Declining demand and growing problems with payments have negatively affected many Polish firms. Naturally, Polish food exporters are now eyeing other markets. Western European markets have become much more important for them than those of the former USSR. Exports to the west turns out to be even more profitable, as prices there are much higher. It would seem that those markets are saturated, yet demand for natural, tasty Polish food is growing.

Paweł Siwecki, the BPCC’s CEO, opened the event by presenting an overview of the trading relations between Poland and the UK. He outlined the support for Polish exporters offered by the BPCC. Mr Siwecki’s presentation included many statistics which offered insight to anyone preparing to expand into the UK. The fifth-largest economy in the world, the second-largest in the EU, and yet one with a huge trade deficit in goods. A market of 64 million consumers. A country whose GDP consists of 78% services, 12% industrial production, 9% construction, and a mere 0.7% from agriculture. This market leaves ample space for importing food. In addition, the UK occupies sixth place in the World Bank’s ranking of the ease of doing business (Poland is 25th) and 12th place in Transparency International’s Corruption Perception Index (Poland is 35th). Which, said Mr Siwecki, means that cooperation with the British is relatively easy and, above all transparent.

Transparency  was also the theme of the next speaker, Sebastian Szulkowski of the law firm Adams Solicitors, but this time in the legislative context. He briefly described the prevailing legal system in Britain, as it significantly differs from the one that applies in Poland. According to Mr Szulkowski, the three biggest differences are:
- A law based on precedent, not on codes,
- An unwritten constitution,
- Standard conditions of contracts.

Moreover, the UK is divided into separate jurisdictions within which various institutions responsible for supervising the food market operate. The first is the Food Standards Agency (England, Wales and Northern Ireland). The second is Food Standards Scotland, which only covers that part of the UK. Mr Szulkowski explained how to effectively check a potential  partner in the UK and described the preparatory steps that a Polish exporter should take before signing a contract.

The perspective and experience of a Polish exporter, newly present on the British market, was outlined by Adam Zdanowski of the meat processing firm, Wierzejki. He began by stressing that this is not easiest of markets to sell to, "If you think your product is great and that it will certainly sell there, then you are wrong. You need to work everything out for yourself from scratch, but if you do that, it will pay off," he said. The company had a huge problem opening a bank account, because a new player on the market does not inspire confidence in British banks, faced with stringent anti-money laundering regulations. And the selection of appropriate workers proved to be a major challenge, because they are much more expensive. Other problems related to the legal complexities associated with renting premises: "We had to wait four months to be allowed to hang up the company sign,” said Mr Zdanowski, adding that the rent they’re paying is amazingly low. Answering the question why the firm chose London, he said: "There are no manufacturers of smoked meats and processed meat products present in London. From the outset, we exceeded our minimum sales target figure by 40%."

Beata Michalska from Intertek spoke about the UK market’s certification requirements for the import of Polish food. Like previous speakers, she emphasised that the UK is a market of unlimited opportunities – especially for producers of meat, confectionary, and fruit and vegetables – but as she said: "they have their own  specific requirements and expectations." Several key points mentioned by Ms Michalska are: credibility and image (CSR etc), repeatable health and safety testing, the possibility of verification (audits) and appropriate labelling. By the word ‘credibility’, British buyers understand possession of certificates such as FSSC 22000, BRC, IFS, HACCP etc. The right image, in turn, is built up by having, among others, ISO 14001, social audits (CSR), RSPO and ISO 22301. Different types of verification avoid the risk of a product recall, but above all help Polish food exporters maintain the appropriate standards and guarantee proper quality and safety. The labelling of products is crucial, and not so simple, she said. “Food labelling is subject to official checks. The proper layout and wording of a label requires sound knowledge of the ever-changing legal regulations and their proper interpretation. And you should also refer to the specific tastes of the British arising from their cultural differences,” concluded Ms Michalska.

Robert Kozak from Fresh Logistics, a part of the Raben Group, introduced the topic of logistical issues that are inextricably linked to exports. In his presentation, he discussed the various services that facilitate and improve the transport of goods, dividing these into contract logistics, road and maritime transport, and aviation. Sophisticated contract logistics can involves a set of value-added operations taking place in the warehouse, such as co-manufacturing, creating products from different components that are then packaged and shipped or co-packing – putting together customised sets of products depending on the order: such as special gift sets or one-off promotions. Contract logistics also offers an e-commerce solution offering end-to-end support for online shops. Mr Kozak looked at national and international road transport, explaining how groupage services – taking less than a full truck-load of cargo, down to the individual pallet – is a huge convenience for smaller producers. Mr Kozak accurately described the process of distribution of goods from Poland to the UK, including the specifics of getting goods to an island market.

"Exchange rates affects everyone. Events that affect exchange rates can translate into  your profit margin," said Jakub Makurat from Ebury, who explained to participants that it is extremely important to manage financial risk. "Managing it protects your cash flow. The currency of any country has greater liquidity than other assets, so all available tools must be used to help stay profitable," he said. A survey conducted by Ebury shows that exchange rate risk is one of the biggest barriers to export facing Polish companies. And who is most exposed to foreign exchange risk? Companies importing goods, services or raw materials in foreign currencies while covering their domestic operational costs in zlotys; companies using foreign capital, with loans, leases, etc in foreign currencies, as well as those that all other operations are dependent on the exchange rate. What can be done to mitigate this risk? Mr Makurat said that for exporters with a large exposure to fluctuating exchange rates should incorporate foreign exchange risk management into the daily practice of conducting business.  And Ebury, as a British firm with its global headquarters in London, is well-placed to help exporters across over 140 different currencies worldwide. 

As was already stressed by Wierzejki’s Mr Zdanowski, exporting to the UK may be associated with various obstacles, therefore the event was intended as a platform during which BPCC members could highlight the range of services offered to assist businesses. Many of the exporters, especially the smaller ones, counts on comprehensive assistance in conducting business abroad. They expect accurate identification of target markets, hints in what form to enter this market, how to find partners and ensure financial security. BZ WBK (Santander Group)’s Barbara Molińska explained the various forms of support offered by the bank. One form of support is to use the Santander Group’s international export development programme. This consists of conferences, trade missions and special events targeted at specific markets or industry sectors. Another of the tools mentioned by Ms Molińska is the Santander Trade portal that gives access to market reports about different countries, statistics related to the value of exports by sector,  suggesting to exporters the best countries to do business, help with finding partners, and providing access to information about the country. Furthermore, the bank provides factoring services for exporters and can obtain information on the financial situation of foreign buyers, which facilitates settlement.

After many hours learning about certification, foreign exchange rates and the complexities of logistics, there was time at the end of the formal sessions for a little lighter, but by no means less important presentation on the role of English in promoting Polish products abroad. David Kennedy of Lacrosse showed the audience how much attention should be paid to the  proper translation of product labels, brochures or company websites. As he said, "nowadays English is the language of business, and translation should be treated as part of the development strategy of the company. “Buy in your own language - but sell in theirs," he said. He offered many examples of how careless translation can effectively ruin the chances of sale. Mr Kennedy also stressed that besides the technical quality of the translation, exporters should also pay attention to the cultural aspects. He reminded listeners that the British English differs from the language of the US, and that the UK is divided into several regions, which is extremely important, so you should adjust the message to the local recipient. Going through various examples of language errors, the atmosphere became quite jovial, which fostered conversations lobbying during lunch, which took place at the end of the meeting. The event, held at the Hotel Mercure in Lublin, brought together over 80 local entrepreneurs.

 

 

Events
2015-11-17, 09:30 am

Venue: Mercure Hotel Al. Racławicka 12 20-037 Lublin
Organiser: British Polish Chamber of Commerce