A leading retail analyst has said that the Irish operations of Marks & Spencer and frozen foods retailer Iceland are likely to be hardest hit in the event of a no-deal Brexit, with Tesco and a number of other retailers also impacted.
Clive Black of Shore Capital told Checkout’s sister magazine ESM that a hard Brexit is likely to impact currency rates, trade flows – "goods into the UK from all over the world, but notably the EU" – as well as consumer and corporate confidence and behaviour.
"Chaos seems highly possible, particularly for UK exporters," said Black. "So if the EU/Ireland imposes controls and tariffs, then M&S and Iceland would undoubtedly be hit considerably, as would Tesco and the other local players in ambient grocery and HPC, a lot of which comes from the UK."
Distribution & Logistics Fears
Black added that while the UK government "has spoken of no blockages" for food imports, "whether or not the distribution and logistics systems can cope is another matter. More broadly though, if the UK goes to WTO rules, non-EU exporters could smell a major market opportunity, something that is not lost on the Argentineans, Australians, Chileans, New Zealanders, South Africans and Uruguayans”.
This, in turn, could present a "significant challenge" to Danish, Dutch, Irish, Italian and Spanish exporters into the UK, "who may need to find new homes for their produce." He noted that Irish beef is likely to be particularly affected.
The 31 October 'deadline' for the UK leaving the EU is now three months away and the British Prime Minister has refused to rule out a no-deal Brexit. "Looking on the bright side, bringing matters to a head is necessary, be that a new agreement, a UK General Election or a second Referendum – as can-kicking and procrastination on both sides is not working," said Black.
Yesterday, Food Drink Ireland (FDI) called on the government to include measures to address the impact of Brexit on the sector, in the forthcoming Budget. Launching the body's Brexit submission, FDI director Paul Kelly commented, “Some €4.5 billion worth of food and drink exports go to the UK. In the event of a 'No-Deal' Brexit and the immediate imposition of tariffs, decisive steps would need to be taken."
© 2019 Checkout – your source for the latest Irish retail news. Article by Maev Martin. Click sign-up to subscribe to Checkout.