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We have recently been made aware of rumours posted on forums and social media and email newsletters stating that Gawith Hoggarth is in some sort of financial difficulty. So we thought it was time to put this misinformation in the ground.
Most of the rumours and speculation are centred around Brexit and trade between the UK and the EU. For those who do not live in either of these territories, allow me to provide a summary of the difficulties that not only face Gawith Hoggarth, but many other organisations.
The Free Trade Agreement (FTA) between the two trading blocks requires producers of tobacco products to meet the specified Rules of Origin (ROO). This is standard between any party in an FTA. For tobacco products, there are several different rules and import tariffs depending on the particular product group (cigars/cigarettes/pipe etc). Since Gawith Hoggarth exports mostly pipe tobacco I shall use this product group to explain these rumours.
If a product meets the ROO then they are able to be imported into the destination market with 0% tariff. If not, then a 70% tariff applies.
So what are these rules?
Well for pipe tobacco, so long as the leaf has been through enough processes and the blend is using at least 10% leaf grown in the EU, then the tariff is 0%. Gawith Hoggarth has acquired some EU leaf although not all types of leaf are available in the EU and what is available is in short supply. In other words, Gawith Hoggarth can now comply with ROO for a large selection of its products.
So what else?
It will be no surprise that COVID has a hand to play in the problems with trade to the EU. The timing of COVID testing in conjunction with dates on paperwork and a lack of drivers does not allow easy or regular shipments to the continent. Then for EU haulage, there is a significant lack of understanding and confidence in how to drive across the channel with the correct customs declarations. However, now we know where the problems lie, we can find the solutions between them. The fact will remain that for many companies, imported tobaccos will become more expensive between the EU and UK.
Although the EU has been a strong market for Gawith Hoggarth, the UK and Rest of World provide a full order book that is growing by the month.
And for those who need further conviction that our little company is still liquid, the £1m Old Snuff Works project is continuing, along with the search for a new production facility.
We are always here to answer any questions and encourage direct questioning rather than gossip.