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Regal Wholesale is planning to set up a European business this year to counteract the challenges posed by Brexit, The Grocer can reveal.

Regal said it had spoken to representatives from the Department for International Trade and was receiving advice on how to set up a company in the Netherlands.

The move will form part of a strategy to grow its sales in the EU back to pre-Brexit levels.

The business used to conduct around 26% of its business within the EU before the Brexit vote.

However, that figure dropped to 11.5% in 2022, as it experienced difficulties with logistics, extra paperwork and increased costs.

Regal said the move would allow its EU customers to trade with a European business, bypassing these Brexit trading barriers.

“After Brexit, our European business didn’t disappear, but it did reduce significantly,” said Regal Wholesale MD Chris Hughes.

“By setting up a European office in which we eradicate all the administrative burden from the customer, we will become a lot more attractive to businesses in places like Holland, Germany or Spain.

“What we’re intending to do initially is set up a company and use third-party logistics providers to see how things go. But as it develops, we’d eventually be looking to get our own building and staff.”

Regal is not the first wholesaler to set up a separate European business. In 2020, Pricecheck set up a Belgian subsidiary company to maximise its trading opportunities in the EU.