Next up in our bi-weekly series on the potential outcomes of a ‘no deal’ Brexit is industry leader Mark Bickerton who shares his personal views. Here Mark echoes some of the concerns outlined by Col Williams in the first in this series, which you can read here.
- Should ‘no deal’ materialise, what will be the consequence for most distributors importing from Europe?
Where import duties are payable on import, there will undoubtedly be delays at ports. We may also find that for European companies selling to the UK there may be more of a hassle related to border checks or documentation than there was before. There may be an increase in prices to cover for this extra time and work.
- Have businesses that you are linked with taken any steps to hedge against such an outcome both for yours and your customer’s benefit?
Those with bonded warehouses will reap the benefit of WTO rules (e.g. relaxed import duty from China) immediately on their uncleared UK held inventory.
Those who import from Europe will most likely have stockpiled as far as possible. Of course that will hit cashflow, and importers will incur extra warehousing and finance costs.
- Temporarily with a ‘no deal’ we will see a 0% tariff on bike imports; cue mad scramble to buy before a hike, or is it not as simple as that?
If we “no deal”, then import duties on bikes from will be at 0% for the foreseeable future. That will reduce consumer pricing and whilst it might at first seem a bonus for bike sales, it will open the market up to lower quality goods, from places like mainland China. Mainland Chinese product can have issues in terms of IP and quality. That could cause a lot of problems down the line.
- With the pound and USD’s value currently looking volatile what does this mean for forecasting and potentially stock levels down the line?
Ah, yes, because of Brexit we are all going to make a fortune on exchange gains! Well, no. We have absolutely no idea what will happen to exchange rates. The chances are that markets will consider a crashing out of the EU as a huge risk to the economy, (UK and EU) so in all likelihood the pound will probably fall further; I expect further than it did immediately after the referendum.
Quoting a Times article on the subject: “The Office for Budget Responsibility has said that in the event of no-deal the pound would fall by 10 per cent immediately, leaving it at parity with the euro and about $1.10 against the dollar.
“Since Boris Johnson became prime minister on July 24, the pound has fallen more than 3.7 per cent against the euro as concerns about the prospect of a no-deal Brexit escalate. On 12th August the pound fell to a decade-low of €uro 1.0724, breaking through its previous post-referendum low of €uro 1.0789 in August 2017. Speculators are braced for further falls.”
- Financial implications aside, what else is there to consider when it comes to safety standards and regulations?
I would expect that most standards and regulations will roll over for the foreseeable future. Regardless, as our standards are based on the same parameters as ISO/CPSC/CEN/DIN/JIT, I would expect that BS will continue to be much the same going forward.
I would say that there is still an outside chance that Brexit will be cancelled. However, should that happen and we end up with a Labour Government, then the outcome could be even worse.
The United Kingdom Union is divided, Parliament is divided, the two major political parties are divided, families are divided. The referendum was 52/48; that actually shows how even it was between Leave and Remain in 2016. I personally think that a margin of 4% on a decision that will affect all 100% of us, when no-one knew what it meant, and where there was a lot of false information, is not a good mandate to make a decision on changing the status quo of 40+ years. No one even knows what a post-Brexit Britain will look like. How will it affect trade? How will it affect UK politics? What will happen in Ireland? What will happen to the pound? What will happen to the EU?
Do we trust our politicians and diplomats to navigate a way forward to a brighter and better future. But also we should keep in mind, is Europe actually a good thing? We have mad regulations. A few rich countries paying for a larger number of poor countries. There are faults.
In conclusion I have to ask, is Brexit truly a plan? Or a just a lot of politicians flannelling around hoping that when the dust settles it will be different and hopefully better. Maybe they are right. We should just get out and forge our own path, but I am still inclined to think we might be better to stay in the EU and continue to try to change it for the better from inside.
Whichever way it goes, I hope we (the United Kingdom) have the strength and resilience to stick together and make good trade and political relations with our global partners.