Business had been going well for Gracefruit Limited – which exports fragrances and raw material for soap manufacturers – but directors Elizabeth and Paul Carnahan knew the onset of Brexit would bring challenges, especially since their main customers reside in Europe.
However, nothing prepared them for the dramatic turnaround in their fortunes when February 1 rolled around.
“It was like a tap had been turned off,” said Elizabeth. “Seventy percent of our retail sales are in Europe.”
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Gracefruit’s biggest customer base is in Germany and it was as if they turned their back on the reliable Longcroft firm, which began trading from the Carnahan’s dining room in 2005, overnight.
Paul said: “I think it’s the idea the UK Government is putting across that Brexit is done even though it isn’t – it’s now in a transition period. Customers in the EU are probably saying to themselves that’s them off, we better find new suppliers.”
While the couple can only speculate why Gracefruit’s German and European customers have abruptly turned their back on the firm, they believe three factors may have come into play.
The first is the UK Government promoting and pushing the Get Brexit Done message and not getting word across about the 11-month transition period, then there is fact these EU firms may be planning ahead for the long term and already looking for alternative suppliers.
Finally the way the Brexit campaign was fought may have alienated EU firms who have had enough of the UK Government’s robust approach.
Elizabeth said: “Instead of spending millions on their Get Ready for Brexit campaign, the UK Government should have been telling European countries there is a transition period coming. They should have told them we still have another year where manufacturers can still fill your orders.
“They should have been promoting trade between the UK and its biggest market instead of acting like spoilt toddlers. We were working on the assumption we were going to leave the EU at the end of January and we started sending out e-mails to our 9000 customers telling them that nothing will change after January 31, your orders will be processed exactly as they have always been.
“We told them it will be business as usual throughout 2020. We ran a little sales campaign, sending out e-mails to our customers stating ‘We Love the EU’ – we also did that back in 2016.”
The Carnahan’s believe the massive impact of Brexit on their firm is just the start of things to come for Scotland and the UK.
Paul said: “A lot of businesses aren’t going to talk about any difficulties they are having due to Brexit because it might harm their reputation. It’s too important to stay quiet about this though – it’s going to affect a lot of people.”
“Our business is based around trade with the EU,” added Elizabeth. “This means we are on the front line, we are the canary in the coal mine. We are seeing the impact of Brexit and being hit by it first.
“We are very employee oriented and look after our staff, we always have, and I’m not keen to have this impact them negatively. My immediate response to this problem was trying to get the customers back, but that is a slow process so you have to cut costs in the meantime.
“The fact I have had to reduce the premises and our business is having a knock on effect on other businesses who we used.”
Elizabeth and Paul have also had to cut ties with the charities they have been helping for a number of years.
“All we can do is prepare for the worst,” said Elizabeth. “And the worst case scenario is all EU trade stops completely. When you start looking at it all it becomes properly terrifying.
“It’s thanks to the structures of the EU that we have been allowed to grow. Shipping to Manchester was just as easy as shipping to Munich for us. The EU made trade as quick and easy as possible.
“The UK market as it stands will not support us and the current staff we have. We could probably restructure, but that would mean going back to the way we worked before we were a limited company – it’s going to set us back a decade.”