Posted by: Richard Walters Tuesday 6 December 2016 14.52

Part 3 of a 6 part Food and Drink Brexit series

It is too early to predict with any certainty how Brexit may impact businesses, particularly without clarity on exit terms. However, businesses can consider the emerging scenarios that may arise as result of UK-EU negotiations. The extent to which firms are affected by, and can react to these scenarios, depends on a number of factors including geographic scale, levels of existing investment in the UK, and industry sector. Until then, the UK will continue to have full access to the single market without any tariffs or regulatory restrictions.

This six part Brexit series examines some of the key focus areas that businesses should consider when looking at their supply chains and longer term growth strategies.

Part 3: Production and distribution networks

Using the UK as a gateway to Europe has long been an attractive proposition for many global firms. Uncertainty over our relationship with Europe will make the UK less attractive for some, but decisions by companies on whether to leave the UK are expected to take between 5 and 10 years due to existing global product placements. Similarly, other companies that have more flexibility in their European production and distribution operations may consider alternatives to manufacturing in the UK that provide better access to EU markets and more competitive labour rates. This choice represents risk and opportunity to make a step change in manufacturing cost of goods sold.

What should businesses consider and what can firms do now?

• Does your business rely on having a production or distribution footprint within the EU? If so, what are the economic and operational impacts of Brexit on this footprint?
• Location of sites. If you have sites outside of the UK but within the EU, how easily and quickly are you able to shift production and distribution to these sites, and what are the implications of this?
• Are you able to leverage any relationships or alliances and partner with firms to gain access to their production or distribution capabilities within the EU? What are the implications of doing so?
• Should you consider ‘lift and shift’ of manufacturing to lower cost EU countries?

Contact

To discuss how we can help your food and drink business, contact Richard Walters, Principal Consultant on 01442 872298 or by .

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Food and Drink Businesses Blog Series: The impact of Brexit of your supply chain

Part 1: The customer proposition

Part 2: Sourcing and supplier base

Part 4: Talent and skills

Part 5: Impact on profitability

Part 6: Capital investments