Brexit

Coast to Capital Launch Brexit Week to support regional businesses

Coast to Capital Launch Brexit Week to support regional businesses

The Coast to Capital Growth Hub is holding a Brexit Week where there will be scheduled 1 to 1 clinics for businesses to come and discuss Brexit concerns with our Account Managers.

In addition, outside specialists are available on selective days to add support and insight with regards to International Trade Issues, Tax implications and the impact of Brexit on commercial contracts.

These Clinics are taking place on Tuesday 18th, Wednesday 19th and Thursday 20th of March in:

  • Chichester at Freedom Works,

  • Croydon SINC and

  • Brighton NatWest Accelerator

There are only 10 appointments available each day so if your business is interested in finding out more or booking an appointment, please call the Growth Hub on 01403 333840 or visit http://www.c2cbusiness.org.uk/event/1552953600/brexit-week.html

Coast to Capital Local Enterprise Partnership (LEP) is supporting businesses to help navigate the UK’s exit from the European Union

Coast to Capital Local Enterprise Partnership (LEP) is supporting businesses to help navigate the UK’s exit from the European Union.

Given the uncertainty being experienced by businesses across the region the Coast to Capital Growth Hub is helping businesses by offering a range of resources including signposting to Government and LEP guidance, running events including business clinics and 1-2-1s, and plans for a helpline.

Government decisions and actions will make a significant difference to the impact that Brexit has on businesses and the Coast to Capital Board has identified a number of areas of concern for local businesses which were set out in an open letter to the Rt Hon Greg Clarke MP as Secretary of State for Business, Energy and Industrial Strategy. These include the EU workforce on which our area relies, widespread uncertainty about the UK's future relationship with international partners and a number of wider economic trends in the region, where the uncertainties of Brexit risk exacerbating separate issues.

Central Government are interested in hearing your views and we have been asked to share feedback on behalf of the businesses in the Coast to Capital area. We will be collecting responses in a number of ways but if you have any thoughts you would like to share please email contact@coast2capital.org.uk.

Tim Wates, Coast to Capital Chairman said:

“Coast to Capital remains vigilant and fully focused on supporting businesses to navigate Brexit. As a strategic and constructive partner we are keen to work closely with Government to address the concerns raised by businesses in the area. This is alongside our work to agree a Local Industrial

UK FOOD RETAILERS FACE £9.3BN NO-DEAL BREXIT BILL

 

·         Failing to reach a Brexit deal could cost food retailers and their supply chain £9.3 billion, according to a new Barclays Corporate Banking report

·         A no-deal, Brexit model would create an average tariff of 27% for food and drink supply chains

·         With grocery margins typically around 3–5%, additional cost is likely to end up being passed on to consumers

As Brexit negotiations continue, a new report shows retailers could face additional tariffs totalling £9.3bn per year for food and drink products imported from the EU if a settlement isn’t reached. The new Barclays report, Scale, Disruption and Brexit – a new dawn for UK food supply chains? shows that in a no-deal Brexit, food retailers would be affected by a new average tariff of 27% on food and drink goods entering from the EU, significantly more than the 3-4% levy that would hit non-food products.  Additionally, every consignment of goods from the EU will require a customs declaration which starts at a minimum of £50.

Last year, the UK imported £48bn worth of food and drink, approximately 40% of the total UK market. Of these, 71% originating from within the EU entered the UK free of customs duties and other trade costs. While a free trade deal or the Chequers option, would help the food industry avoid tariffs and related duties, a no-deal Brexit could mean significantly higher costs for retailers and consumers.

Ian Gilmartin, Head of Retail at Barclays Corporate Banking, comments: “The food and drink industry is one of the country’s most important sectors, employing millions of people across the UK.  For the good of both UK business and consumers, the potential impact on our producers and grocery retailers should be front and centre of Brexit negotiations.

“Some products would avoid tariffs, even in a no-deal scenario, but for most goods the effect of an increased tariff burden would be extremely damaging, and cheaper goods would be the hardest hit.  71% of our imported food and drink comes from the EU, and 60% of our exports go to the EU. A positive agreement on trade is essential if we are to protect UK exporters and avoid significant price rises for UK consumers.”

The cost of a no-deal Brexit

Food retailers are waiting to see whether a ‘Brexit deal’ can be reached that keeps costs down for the sector. A full customs union, for example, would maintain the current tariff-free trade enjoyed by the UK and the EU but would limit the UK’s ability to trade unilaterally with other countries.  A free trade agreement (FTA) would be likely to minimise the amount and cost of new tariffs imposed on trade. Though an FTA would still require extra fees from logistics, such as customs declarations, it would also free the UK to make other trade deals.

However, a no-deal Brexit would impose significant costs on food retailers, with varying tariffs for different types of products. For example, the Barclays report shows that fully processed food and drink products, such as orange juice, will attract the highest tariff rate of 31% compared to 29.5% for semi-processed food and drink such as white sugar, and 9.7% for primary products and raw materials like bananas.

Beyond such category based surcharges, some products also attract ‘specific duties’, which are tariffs levied on a per unit basis; that is, by weight or volume. The Barclays report shows specific duties disproportionately target certain products including meat, cereal, olive oil, wine and sugar-based foods. By their nature, these tariffs place a higher burden on lower-value transactions.

Hardest hit will be those products that attract both a category tariff as well as a specific duty tariff, such as frozen beef with a specific duty of 298%. Common cooking products also face steep duties including beef cuts at 101%, cream at 81% and garlic at 71%.

Further costs could also mount under a hard Brexit.  In addition to customs declarations, comes the burden of complying with stringent EU Sanitary and Phytosanitary (SPS) regulations, which could be the equivalent of paying an extra 8% in duty tax on EU food and drink imports.

Backdrop to Brexit

While Brexit is currently the most pressing issue for food retailers, wider consumer trends are also providing new challenges and opportunities. As the pace of life becomes busier, shoppers are visiting stores more often, with trips up 14.3% from 2013 to 2018, but buying less per visit, with average spend down 8.5% during the same period². According to the Barclays report, the convenience sector has been growing at an above-average rate, at 10% over the past four years compared to 7.1% for the industry – and is now worth £40bn³. Likewise, the online food market has grown by an average of 12% since 2010⁴.

At the same time, as wider economic upheaval has pinched household budgets, consumers have turned to discount food retail outlets such as Aldi and Lidl, leading to the ‘Big Four’ facing a nearly 10% decline in market share since 2011. With many food retailers already struggling to adapt to a changing British market, Brexit negotiations could be adding an extra layer of uncertainty.