Brexit worries business

PATH UNCLEAR: MANY FIRMS IN LIMBO AS AUTHORITIES NEGOTIATE TERMS

Some believe Britain will prosper, but only 11% ‘made plans’.

As the head of a British company that imports, exports and manufactures food, Adam Reader is at the centre of the Brexit storm, facing threats at every turn.

But unlike the majority of company bosses who are reluctant to make concrete plans when a future trade deal with Europe has not yet been decided, Reader is not going to wait.

Instead, he’s charging ahead with investments that will split his operations between Britain and Europe – a strategy he is confident will contain any damage from changes to currency, regulations and tariffs as he ships his products globally.

“We’re lucky. We have a clear path. We’re very advanced now in terms of planning,” said Reader, the 47-year-old manager of Grace Foods UK.

“A lot of the businesses I’m talking to are not clear about what they’re going to do come the date of Brexit,” he told Reuters at his plant north of London, where Grace’s Caribbean, Mexican and Chinese products are stored. Britain’s 2016 vote to leave the European Union stunned many businesses, with the prospect that border delays and tariffs could fracture intricate supply chains built up over 40 years. The plunge in the pound has already forced importers to cut costs and sparked concerns about consumer spending. Those who voted in favour of Brexit argue that although the economy could be hit in the short term, Britain will prosper because it can strike trade deals with other nations quickly. For the moment many companies are in limbo, however, as Prime Minister Theresa May’s party wrangles over terms of the departure, due in March 2019.

The EU says future trade cannot be discussed until the terms of the divorce have been agreed, meaning a final settlement may not be unveiled until late.

Only 11% of companies have started to implement contingency plans, a survey by the Institute of Directors said.

Britain’s Food and Drink Federation, which speaks for an industry employing 400 000 people, says companies should be preparing for all scenarios.

About 30% of Britain’s food and drink comes from the EU, while 61% of the food and drink exported from Britain goes to the EU. – Reuters

We’re advanced now in terms of planning.