United Kingdom Market Access

Import regulations and customs duties

Regulations
In accordance with its European Union membership, United Kingdom applies the European Union (EU) rules that are in force in all European Union countries. While the EU has a rather liberal foreign trade policy, there is a certain number of restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products aimed at favouring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.

Moreover, for sanitary reasons, regarding Genetically Modified Organisms (after being allowed in the European territory), their presence should be systematically specified on packagings. The beef cattle bred on hormones is also forbidden to import.

The BSE crisis (often called the "mad cow disease") urged the European Authorities to strengthen the phytosanitary measures to make sure of the quality of meats entering and circulating in the EU territory. The principle of precaution is now widespread: in case of doubt, the import is prohibited until proof is made of the non-harmfullness of products.

Distribution

In 2004, British retail trade was worth 361 billion euros, a growth of 4.5% as compared to 2003. The distribution market in the U.K. is quite specific: price plays a secondary role when it comes to consumer's choices. The British market offers numerous opportunities, especially in the food sector. The United Kingdom is divided into 4 regions: England (London and Midlands are economically very powerful), Scotland (Edinburgh), Wales (Cardiff) and Northern Ireland (Belfast).

The Business to Consumer (B to C) market

Food product sales was worth 104 billion pounds in 2004, constituting 45% of retail trade. Distribution is carried out through specialised branch stores, departmental stores (which represented 17% of the food trade in 2004) and cooperatives (Coop represented 5% of the food market in 2004). The principal chains of supermarkets and neighbourhood stores are:
- Sainsbury
- Morrissons ( merged with Safeway in 2004)
- Asda (taken over by Wal-Mart in 1999)
- Tesco

These 4 stores alone constitute more than 70% of the turnover of this sector. The market-share of grocery stores and independent supermarkets is declining and together they constitute not more than 5% of the total turnover of the food distribution market.

Consumer goods are marketed throughout the country through the branches of large chain stores.Currently, large departmental stores such asMarks & Spencer, Woolworths, Boots, Sainsbury, large DIY stores, suburban furniture stores,etc. are all experiencing growth.

The Business to Business (B to B) market

The sectors experiencing the highest growth are aerospace, defence, chemicals, pharmaceuticals, construction material, professional and business services, cultural services and products, consumer goods, health care, information technology, communications, and tourism. In general, the trend is toward continued growth in value-added products and services. The European Union has allowed for legislative harmony, which has resulted in building relations between agents and principals as well as relations between distributors and suppliers. It is thus advisable to use these 2 intermediaries in order to penetrate the British market.

The United Kingdom is one of the preferred countries for FDI (Foreign Direct Investment) which reached more than 18 billion dollars in 2004, and currently fully one-third of all European companies making investments in the European Union choose the United Kingdom. Flexible investment legislation has allowed for this s trend. Various agencies, mainly Regional Selective Assistance and Invest UK, provide assistance and information to international companies interested in the British market.

Transportation of goods

By road
The United Kingdom signed certain agreements: CMR, TIR, ATP and ADR. Roads are dense and effective. The road network extends over 400,000 km of tarred roads, of which 3,300 km are highways. Most of the goods are transported through the road network. United Kingdom is a powerful market of the European road transport and since the market was liberalised on the European level, this sector has undergone strong upheavals. The government, through the Department of Transport, has called on the private sector to finance the creation, financing and construction of new roads, and a toll-system on highways will be the next step.

By rail
The rail network extends over 18,000 km, of which 5,300 km are electrified. In April 1994, the Government favoured the privatisation of British Railways, the public company, by creating 25 independent companies to run the network as well as Railtrack Plc, a branch intended to take care of the maintenance and the management of the infrastructure. An overview of the British rail system can be found on http://www.rail.co.uk/. {Railtrack Plc} {British Railways}

Various plans of improvement of the railway infrastructure such as the modernisation of tracks in West Midlands, a high speed connection between South and North as well as a project joining the East and the West are under study.

Since December 1994, Great Britain has been connected with the European continent by the Channel, exploited by Eurotunnel company and the train Eurostar. {Eurotunnel.}"

By sea
97% of the British external trade volume is handled by sea transport: it consists in about 600 million tons a year. There are hundreds of ports well-equipped for goods transportation. The most important are London, Plymouth, Southampton, Aberdeen, Liverpool, Felixtowe and Dover. England, Scotland, and Wales hold more than 80 ports as members in the British Ports Association, whose aim is to represent and protect its members from the market turmoil and to integrate European and international policies. In 1998, 530 million tons of freight were handled by the big ports. {Plymouth}"

By air
The internal air transportation network is not very important. However the English airports have an important role to play in the international transportation. The main airports are London (Heathrow and Gatwick), Manchester, Liverpool, Newcastle, Edinburgh and Glasgow. In the United Kingdom, the airliners are all private companies and so are the main airports. {Heathrow} British Airways, which is privatised since 1987, is one of the leading airline companies in the world with 45 million passengers transported in 1998-1999. In 1998 about 313,650 thousands tons of freight were handled by the two London's airports. This is an increase of 6.7 % compared to that of 1997. The United Kingdom holds several private air companies such as Virgin Atlantic, Britannia Airways and British Regional Airlines."

Standards

The British Standard Institution ( BSI) is the organisation in charge of developing the activities of normalisation and certification. It is responsible for elaborating and publishing standards. It has to supply all types of services to ensure the quality of products and services. {British Standard Institution ( BSI)}
Some imported products, whatever their origin, have to prove that they conform to the technical regulations leading to an approval. Obviously, the European Union standard is required, but other technical requirements, through a system of certification, can not be neglected, according to the market and competition. ISO 9000 standards are generally considered as a standard quality factor by most of the companies. (Quality ISO).

Patents and brands

The institution responsible for the protection of intellectual property in Great Britain is the National Patent Office in Newport. The United Kingdom is part of the Agreement of Paris for the protection of industrial property and of the Agreement establishing the World Intellectual property Organization (WIPO). The United Kingdom signed the Patent Co-operation Treaty and the agreement of Munich on European Patents. Finally, they signed the Agreement of Strasbourg on the international classification of patents.
As for trademarks, the United Kingdom is part of the Agreement of Nice on the international classification of the possessions and services for the Register of trademarks.