Brexit

So what do you think’s going to happen, then?  No deal, no Brexit, Theresa May’s deal, or some other option as yet undefined? It’s a big part of ACS’ job to be the fulcrum between what happens in politics and what happens in your business, and I think we’re pretty good at providing new and informed analysis to you, and giving credible and evidence-based input to government when it comes to issues related to our sector. On Brexit, frankly, this is a lot harder. It’s the biggest, and certainly the most fever-pitched debate and development in British politics in a generation, and one which certainly impacts a sector like ours that sells imported food and other products, and which trades in every community in the UK. How can we find a way through the speculation and the noise and give you more insight than you’ll just see on the news, and cut through the complex potential impacts on our sector to give a clear message to government?

Here’s where I think we can almost all agree: leaving the EU on 29 March 2019 with no deal would at very least plunge our sector into the unknown, and would probably cause significant supply issues. Without any withdrawal agreement or transitional period, and in the event of no involvement with customs arrangements and product standards, manufacturers and importers would see disruption , and that would inevitably impact anyone buying their product, especially where the supply chain for those products is time critical. Even ambient product will see production affected as the range of ingredients drawn from any number of countries will each be affected in different ways, and gridlocked transport routes will impact every vehicle, whatever it’s carrying. This is most directly concerning our friends in the supplier, manufacturer and distribution world, but clearly this will have an impact on us because additional costs in sourcing, transport and storage will inevitably pass down the supply chain, and shortages of product will manifest in short deliveries and challenges maintaining availability. 

Is this significant disruption worth it for maintaining our strongest negotiating position, because the business community fearing no deal is in itself a stance that influences the debate? My view: the EU already knows full well the business community’s unease at a no deal outcome, but many MPs still risk underestimating this, so we need to make them aware that their local shop will bear some of the consequences of no deal, and that it would impact our customers and the wider communities we serve.

Beyond that, the prospect of a planned, orderly Brexit divides our sector as it does most groups in Britain. Most independent retailers don’t know whether Brexit will be a good or a bad thing for their business, and of those that do there’s a small but growing majority who see more downside than upside. My view: the main effects will be felt further up the supply chain, so yes there will be a knock-on impact from changes in the movement and cost of goods, and from the likely contraction in the labour market … but most of these impacts, and the burden of regulation attributed to the EU, are not in themselves critical to the long term future of our sector.  A year ago I heard Lord Price, the former Waitrose MD and former government trade minister, describe Brexit’s impact on our sector as “no big deal”.  He was simplifying for effect but at root he was right – of course it’s a big deal for the UK, but for our sector we’ll see businesses adapt, confront threats and identify opportunities, just as we do with every other development that impacts us.

I’m confident our sector will remain relevant and will cope, whether the Brexit is harder, softer, or indeed no Brexit at all.  A no deal, though, would be a big deal.

We are really interested in any detailed questions or views you may have on this issue.

This entry was posted by Chloe on Mon, 19/11/2018 - 16:33