Is your business prepared for Brexit?

The UK left the European Union on 31 January 2020. We know that the uncertainty around Brexit has made it difficult to know how to prepare, but our expert team will help you to put practical steps in place to make sure your business is ready during the commencing transitional period.

Our team of Brexit advisors offer in-depth analysis on the political, policy and legal implications of Brexit and how it will affect your business.

We specialise in a wide range of sectors and can help to answer big questions about Brexit and the preparations businesses should make, including:

  • What your business should do in the event of a no-deal Brexit?
  • How will the transitional period between Brexit and the entry into new UK-EU trade agreements affect you?
  • How will any long-term new trade agreements affect you?
  • What contingency plans will you need in place for each potential Brexit Scenario?

Our team of advisors can provide bespoke assessments of your business, including:

  • Assessing how your business could be affected by Brexit
  • Providing personalised practical plans to ensure your business is ready

We've also developed FBCMB sector specific regional tube maps, where you see the potential threats and issues which will affect your business. The 'lines' include international standards, EU rules, opportunities, people and trade. On each step of this journey you will need advice and our team are on hand to provide it.

It is already clear, that you or those you supply are not going to enjoy the same access to the EU's Single Market under a trade agreement as you did while the UK was a member of the EU.

The main threat you face is uncertainty about the outcome. Nonetheless, you need to assess the impact of a worst-case-scenario Brexit now and have in place contingency plans which are flexible enough to respond to developments in the negotiations.

Our team can help you with all that you need in four steps:

  1. Information - You need to have procedures in place to ensure you are well-informed about the Brexit process. Relying on press reports won’t be enough. Understanding and forecasting the likely impacts are fundamental to your Brexit strategy to gaining early competitive advantage. FBC Manby Bowdler will give you with a tailored service which monitors progress, analyses published documents, and identifies the impacts for your business the moment they become clear.

  2. Preparation - Prepare for Brexit with and without a deal. To do so, businesses should carry out a Brexit legal impact assessment followed by a Brexit commercial impact assessment. These will form the baseline of any contingency measures. 

  3. Action - You should decide what contingency plans you need and when they should be activated. You might be marginally or massively impacted. Contingency measures could include setting up alternative supply chains, identifying new customer markets, or re-skilling employees. FBC Manby Bowdler has been at the forefront of advising clients on the commercial implications of Brexit. We have the experience to help you devise and implement contingency measures for your business, and stress-test them against a range of Brexit scenarios, whatever industry you operate in.

  4. Influencing - The best way to avoid a Brexit that damages your business is to influence the outcome yourself. Brexit provides an opportunity to do that, which businesses should exploit more. FBC Manby Bowdler has the benefit of advisers in Brussels and London. We can devise and implement policy advocacy strategies to influence the course of further Brexit negotiations, the negotiations on a new trade agreement and build long-term regulatory compliance strategies, including relationship-building with key influencers and government authorities.

Our team of experienced sector specialists has examined the potential impact of Brexit in your sector and can provide an in-depth analysis on the political, policy and legal implications of Brexit, and translate what they mean for manufacturing, agricultural and hospitality clients. We have an expert understanding of how each piece of the jigsaw of EU policy and legislation fits together, an insider’s knowledge of the political and administrative processes of the negotiations, and considerable experience of how UK legislation is enacted. 

Farmers face biggest Brexit hit

16/04/2019

Ministers have been warned that farmers face falling profits whatever form Brexit now takes. FBC Manby Bowdler’s Brexit director Peter Wilding analyses the situation facing the UK’s farming industry and what it might mean for farmers across Shropshire.

In a devastating report published on Friday, the government-backed Agricultural, Horticultural and Development Board predicted that post-Brexit farming incomes would fall by 25 per cent. 

This wasn’t just in an apocalyptic “no deal” scenario. If it was, farmers seeing this figure could mutter ‘Project Fear’ and carry on their arduous work. 

The problem is that this collapse occurs in any Brexit scenario. It is no exaggeration that entire enterprises, for example poultry production, could be unviable if the AHDB predictions are correct.

This is a problem because, in Shropshire, poultry accounts for 86 per cent of all cattle and livestock. Sheep is 10 per cent and cattle, 3 per cent. Shropshire has the second highest amount of sheep than any other local authority in England, the second greatest amount of cattle and the third greatest number of chickens.

Farmers will face higher labour costs, roller-coasting prices and slashed profits. Even if Theresa May’s benighted Withdrawal Agreement finds some way of getting itself over the Parliamentary line before the next Halloween cliff-edge date, there are no sunlit uplands for British agriculture.

Why is this? 

Three reasons:

1. Domestic agriculture policy: In sectors where direct financial support accounts for a significant proportion of farm business income, the AHDB report shows the dramatic immediate impact of reduced support levels on business profitability.

2. Trade policy: The UK is a net importer of products for most food sectors, and the EU is a key trading partner. In areas such as dairy and pigs, the scenarios show that farmers may just about benefit from rising prices, reflecting the rising costs of trade. In sectors where exports are significant, such as cereals and sheep meat, rising costs of trade for UK products into EU markets will mean downward pressure on domestic farm-gate prices.

3. Immigration policy: Higher labour costs, resulting from restrictions on migrant workers, will reduce farm business incomes. 

So to understand the general impact on farmers, first we need to know in which agricultural sectors the UK is a net produce importer or exporter. Where the UK is a net importer, farmers tend to gain from rising prices.  

However, as fixed and variable costs for fertiliser, feed and labour are predicted to rise whilst EU subsidies vanish, being an importer would still reduce overall income in a “deal” scenario. 

But, in a “no deal” scenario the dumping of cheaper global livestock produce on the UK market could lead to a collapse in farm-gate prices under a no deal outcome. Why? 

Because under the World Trade Organisation tariff regime there is a 0 per cent tariff on the first 230,000 tonnes of livestock produce meaning a fall in average farm profits from around £42,750 a year to £26,285 in 2022.

In its report released on April 11th the AHDB says that Shropshire sheep farmer’s income - even if a deal is done with the EU – will plunge from the current average of £25k per annum into a marginal annual loss. 

In a no deal scenario, sheep farmers would face a business-busting loss of on average £10k each year. 

In short, farmers face the following unpleasant scenarios:

Income for beef and sheep falls to £15,000 with a deal but to £9,771 in a no deal scenario.
Income for pig farms drops under a deal to £21,273. The average farm loses £10,741 a year under no deal.
Incomes fall for the poultry farms under a deal to -£32.60 per 1,000 birds and under no deal the fall is smaller, to 1p per 1,000 birds.

All these falls are a relative drop in the ocean if the current CAP basic income support is removed. Expect an income collapse of 50 per cent on top of these estimates not least because the government have already stated that direct payments will be focused on agri-environment management in future instead of production.

What farmers need to understand is that the AHDB sees no positive outcome on already stretched incomes from any kind of Brexit. 

It says in its conclusion that change is coming. The question is only how fast it will come.

In the event of a deal, farmers’ first priority is to deal with the removal of direct payments. If there is no deal with the EU, accelerated restructuring of farming sectors seems inevitable. The only farms which may weather the oncoming storm are large, top performing enterprises.   

Next steps:

West Midlands’ farmers need to ensure that their incomes are protected. To do that farmers need legal advice soon to ensure that their supply contracts, regulatory compliance, employment practices and subsidy regime are fit for purpose in order to avoid the shock that will come from Brexit – with or without a deal. 

 

Peter Wilding, our Brexit Director, is able to provide in-depth analysis on the political, policy and legal implications of Brexit, and translate what they mean for manufacturing, agricultural and hospitality clients. If you would like to discuss any issues with Peter, please call him on 07901 008220 or email peter.wilding@fbcmb.co.uk.  

Back to blog posts

Add Comment

Enter the name you would like to appear on the comment.
Enter the email you would like to use to get updates. You email is not visible and can not be used by other users.
 
Enter you comment help.

Meet our service specialists

  • Submit

Testimonials

Sign up to our newsletter

For the latest news and updates

Close ×

Sign up to our newsletter

For the latest news and updates

First name*
Surname*
Job title (if applicable)
Business name (if applicable)

Categories
















*Mandatory fields

Close ×

Search

Close

Enter your details below...

First name
Surname
Email address
Value linked to Google Ads tracking