Food and Drink

Our food and drink experience

The sheer variety of food and drink items available today, coupled with the intricate nuances of international trade regulations, often complicates the classification process.

Variations in a product’s composition can shift a classification within a Heading or move it across Chapters. What makes things more complicated with grocery products is that the information used to determine classification is often not held in one location, but instead across multiple data sources with differing levels of accessibility.

When you have all the information to hand, further difficulty lies in the differences in interpretation of the tariff between regions. This can lead to the same product having a different tariff code based on the import region.

Further complications also can arise from the sheer amount of information that must be consulted to be fully compliant including a detailed ingredient list, nutritional values, product weight, country of origin and species.

This is why it is crucial that the team classifying your goods has a thorough understanding of the food regulatory environment, or you have access to classification experts like our TariffTel specialists, who can provide much needed advice and support.

Our process for food and drink classification

Analysis

Build your knowledge base – Analyse the tariff book, read the rules and review the rulings

Solution

Know your product – Find out the key product details including detailed ingredients list, nutritional values, product weight, country of origin, species and state (ie frozen)

Implementation

Keep up to date – Review tariff book changes and check for updates

Key Stats

40%

Of tariff codes used are incorrect

10-15%

Of international shipments are delayed due to customs issues which include incorrect tariff codes (Source: American Association of Exporters and Importers)

40%

Increase in admin time to resolve tariff classification errors (Source: Baker McKenzie Law)

4%

Fines of up to 4 x the duty loss or $500k per incorrect shipment (Source: US Customs and Border Protection guidelines)

Featured customer:

M&S INTRODUCES NEW, EFFICIENT AND COST-SAVING APPROACH TO CUSTOMS CONTROLS IN WAKE OF BREXIT

Challenge

BREXIT brought a raft of new regulation and procedure to retailers’ doorstep, particularly those in the food and drink industry.

Food and drinks goods are notoriously hard to classify because of the complex nature of their make-up, extensive ingredients list, varying production methods and different packaging options. From the 1st January 2021, all businesses that shipped goods between Great Britain and the Northern Ireland needed to follow a new set of customs and tax rules which meant significant changes to the way they had previously ran their business.

M&S addressed the challenge head on by implementing TariffTel to manage all food classification. TariffTel provided the streamlined, accurate and quick approach to classification that was needed at this time. Together, we ensured their much-loved food and drinks products continued to cross borders smoothly through BREXIT and that consumers were unaffected.

M&S also engaged in the process of an AEO application which requires businesses to prove their systems are robust and fully compliant with customs regulations. TariffTel was a part of this application.

TariffTel solved the challenges in classifying post-BREXIT, prioritising compliance & accuracy

Why TariffTel

TariffTel has a unique method to classification. Not only does it integrate with a business’ internal systems, it also leverages a business’ suppliers in the classification process allowing them to input key data about products for verification. It captures all the data needed including product characteristics such as sugar and fat content, to enable the correct tariff code to be assigned. As a result, this grocer is assured it is paying the correct duty on every product, there is no under or over-paying which can often happen.

Working collaboratively, TariffTel’s customs experts are able to assist with classifying even the most complex of food and drink products including, for example, a vegan composite ready meal, made primarily of mycoprotein, with only trace elements of vegetables.

Results

100%

Compliance Record

90%

Accuracy of its product master data

This new solution not only streamlined classification processes to speed up the time it had previously taken to classify a product (with classification speeds increasing 5 times), but it ensured M&S had the correct tariff code every time, allowing them to gather documentation relating to the code and be compliant.

Shipment delays due to incorrect classification codes were avoided and the team were assured that they were paying the correct duty rates on all products. The new system enabled M&S to adapt and maintain its trading alliances with suppliers and stores across Northern Ireland and deliver the same high-quality service and smooth-running operation it always had.

This digital transformation provides M&S with a framework for the future.

“This solution was transformative for M&S and ensured they managed the introduction of new BREXIT regulations smoothly, and without disruption to customers.

TariffTel’s tariff code accuracy is unbeatable. When high standards of compliance are crucial in your organisation, businesses need a solution that guarantees accuracy.”

Elizabeth Davies

TariffTel Customs System Manager

Case studies