The decision to leave the EU has caused a shock wave across the UK, Europe and elsewhere in the world. The full impact it will have on business is yet unknown but the decision to leave the European Union has already had a major effect on the value of sterling. We set out to understand the issues and challenges businesses in the food packaging and food manufacturing sectors are facing, or planning for, in the face of the expected changes in our marketplace. It goes without saying that the longer businesses are in the grips of market uncertainty around the exit process, the longer it will take for businesses to recover from the likely impact.
We now have the pleasure of announcing the results of our BREXIT survey carried out amongst professionals in the food packaging and food manufacturing sectors. The results will hopefully give you some guidance on the key issues, the priorities and how other people in our industry are preparing for this. Key challenges highlighted by the respondents include:
– Coping with volatility of the currency markets
– Managing the Supply Chain
– Dealing with the regulatory changes
– Maintaining access to talent in the single market
If you want to read the full results of our survey you can download the eBook here.
2. At the Alexir Partnership we
undertook a mini survey to
understand the impact that Brexit
has on companies in the Food
Packaging and Food Manufacturing
Sectors and the issues and
challenges these businesses are
facing as a result of it.
3. Research conducted among an online sample of professionals in the Food Packaging and Food Manufacturing Sectors in the UK during January 2017. The
information contained within this eBook is strictly for informational purposes. If you wish to apply ideas contained in this eBook, you are taking full responsibility
About the eBook
The decision to leave the European Union has already had a
major effect on the value of sterling which helps some but
not others.
Our survey helps us all in the industry to identify the issues
that need overcoming and reveal how businesses foresee
handling the Brexit transition. By making the results available
in this ebook we can hopefully give you some guidance on the
key issues, the priorities and how other people in our industry
are planning for this.
4. Businesses feel that the media reporting led
to business uncertainty and thereby created
a lack of confidence amongst consumers.
A positive impact for the economy is that
companies can potentially increase their
market share by bringing back
manufacturing to the UK from the
continent.
According the survey, 97% of respondents
say their organisation will be affected by
the business impacts associated with
BREXIT.
5. The UK’s vote to leave the European Union will
impact companies in Britain and beyond. Our
survey shows that the majority of businesses
believe their organisation will be affected by
the BREXIT transition.
The key issues/challenges highlighted by the
respondents include volatility of the currency
markets, continuing access to the single
market, supply chain management and
dealing with the regulatory changes.
Other issues that were brought to light include
access to talent in the single market, access to
seasonal workers from the EU, duty taxes on
British products exported to the EU and taxes
on European goods.
73% of respondents say the biggest
concern for their business is the volatility
of the currency market.
6. Which aspect of the business impacts
are of most pressing concern to your
organisation?
75%
31%
41%
9%
31%
19%
Is your organisation now making plans to
respond to these business impacts?
16%
84%
7. The pound has fallen to its lowest level in more than 30
years against the dollar following the UK's vote to leave
the European Union. It has been one of the most
noticeable consequences of the BREXIT result.
Respondents of our survey mentioned that for most of
them the decreasing value of the pound meant that it
would be more expensive to import products from outside
the UK which has a direct effect on margins. On the
upside it would be cheaper to export products from the
UK to Europe.
Respondents also mentioned that it would be more
expensive to source raw materials from outside the UK.
This is of particular importance for businesses in the food
packaging and manufacturing industry as it becomes
more expensive to maintain their existing supply chain.
72% of respondents believe that BREXIT is an
opportunity and think that foreign investors will
be looking to invest in the UK.
8. What impact does the decreasing value
of the pound have on your business?
72%
31%
41% 34%
16%
9%
Do you believe that foreign investors
will be looking to invest in the UK and
purchase goods and services?
72%
28%
9. The survey shows that one of the main
priorities for businesses in the food
packaging and food manufacturing sector is
to alter the supply chains.
Companies must develop or revise their
plans to improve the supply chain. They
have to determine how BREXIT will lead to
an alternative sourcing model as well as
identifying which trading countries could be
more strategic than others.
For 50% of the respondents altering the
supply chain is their top priority in dealing
with the impact of BREXIT.
According to respondents of the survey
another top priority is changing their
business strategy. How does the post-
BREXIT era impact their business and how
should they respond to it? What changes do
they need to make to their long-term
business agreements?
Respondents see negotiation of their
existing deals with European partners as a
priority as well as revising their Terms of
Business to build in protection. Other
businesses may be so adversely impacted
by BREXIT that they may seek to terminate
their business relationship.
10. What are the top priorities in dealing
with the impact BREXIT has on your
business?
47%
25%
31%
50%
28%
9% 12%
Is BREXIT your top procurement
challenge for 2017? 28%
9%
62%
11. More than ¾’s of the respondents see an opportunity in BREXIT to source more of their products and services
in the UK. In addition more than half of them feel they are in a position to change suppliers, materials and
logistics as their best weapon against the procurement challenges that BREXIT affords.
Start
planning
now
Lock down
exchange
rates to
reduce
volatility
risk
Source from
UK suppliers
12. Are you in a position to change
sources, suppliers, materials and
logistics as your best weapon against
the procurement challenges of 2017?
In your opinion is there an opportunity
for growth in UK sourcing of products?
65%
35%
78%
22%