An Overview of the Aroma Chemicals Industry

The aroma chemicals industry is facing a challenging time as we move through 2021, with dual impacts due to Brexit and COVID-19.

Coronavirus continues to dominate the headlines, and with good reason, but for many businesses the disruption caused by Brexit is the more significant day-to-day obstacle to overcome.

In this overview of the aroma chemicals industry, we’ll take each issue in turn as well as looking at some of the related problems faced in the global aroma ingredients supply chain.

Brexit

The Brexit deal negotiated by the UK and EU does not serve the fragrance ingredients industry well.

Some of the immediate obstacles created by the end of the transition period include:

• Double duty payment demands
• Extra customs declarations
• Higher freight charges
• New delays at port and during shipping
• Paperwork and bureaucracy

Across supply chains, from the point of production through intermediary suppliers and to the point of consumption, paperwork and bureaucracy are increasing, costs are rising and shipments are taking longer to arrive.

Some of this may be a case of ‘teething problems’ following the end of the Withdrawal Agreement transition period, but the further we move through 2021, the more permanent these disruptions are likely to become.

Coronavirus

Like other sectors, the aroma chemicals industry has faced business interruption and upheaval due to the COVID-19 pandemic and the need to adopt COVID-secure working practices.

This includes workforce pressures due to sickness absences and employees self-isolating, either following a positive test result or as a precautionary measure due to close contact with an infected individual.

Movement of goods, including fragrance ingredients, has been subject to tighter restrictions with a greater emphasis on hygiene to prevent the spread of disease.

At the same time, a surge in businesses and domestic customers shopping online has stretched delivery networks to breaking point, affecting B2B supply chains as well.

Other Aroma Chemical Industry Challenges

The industry also faces other challenges arising from Brexit and COVID-19, or independently from both of those issues.

Availability of hauliers is extremely tight – in part due to post-Brexit cabotage rules and higher demand for home deliveries during Coronavirus restrictions.

But this is also just an exacerbation of existing pressures on haulier numbers, which have been a cause for concern for supply chains for many years already.

Complexities surrounding rules of origin for aroma ingredients also continue to put pressure on the bureaucracy and admin involved in sourcing high-quality ingredients.

In preparation for the UK’s exit from the single market, Zanos Ltd founder, Julian Sarkar, attended several meetings with government departments such as BEIS, Defra, HMRC, HMT, DIT both in person and as a listed advisor for small businesses in the Chemical Industry.

In his role, he highlighted the impact that Brexit would have on the chemical industry, particularly the introduction of UK REACH versus the existing EU regulatory system.

Our accounts team attended workshops hosted by the CBA (Chemical Business Association) on Brexit Importing and Exporting and EU Readiness.  We are also working closely with EU suppliers to gain greater transparency on additional costs and trying to minimize said costs for our UK customers.

Zanos are proud of our robust supply chains, and of course, to supply aroma chemicals used in many hygiene and cleaning products. As we move through 2021, we will continue our commitment to the highest standards for all our customers and valued suppliers.

Please contact our sales team today on 01565 755899 and we’ll be happy to help. Now part of The Stort Group, we are pleased to be offering a diverse portfolio to our B2B flavour and fragrance customers.