Brexit problems.

_Brian

Our small business imports near all materials from the UK.
Brexit and any new customs, border issues would be a big hit and god knows what charges would be added, shipping would likely increase too.

Any one else in similar situation and how are ye planning to deal with it.

Atlantic Dawn

If they follow same as Norway and Switzerland you will have no problems. Brexit is likely to take 5-10 years if it does happen, won't be overnight.

SnipSnop

In the same boat. The UK accounts for 30% of all our exports (B2C) and I'll be honest starting to freak out a bit.
Spoke to our currency trader in our bank the other day, they were after having a long info meeting.
His words were basically if the average voter knew just exactly how much the **** will hit the fan there would be a 90% vote to stay.

I personally think action will be swift in case of an exit. The EU can't be seen to be soft on countries leaving.

1. Sterling will drop 5-10% if not more vs the euro. This will happen almost immediately.
2. Import/export charges/customs will be introduced until they can negotiate new trade agreements. This will be a long process, but it is anybody’s guess how fast this will happen.
3. No idea about VAT.

Some links
http://www.theguardian.com/small-business-network/2016/mar/22/eu-referendum-brexit-change-vat-import-duties
https://www.meridianglobalservices.com/blog/2016/04/21/Brexit-and-Cross-Border-VAT-What-Could-It-Mean-For-Your-Business

But will be a total mess. Fingers crossed they stay

_Brian

I'd also worry that the Eu will be firm against them if they leave, last thing they will want is for the UK to look like they have seriously benefited by leaving as it might encourage more to leave.

DubTony

SnipSnop wrote: »

1. Sterling will drop 5-10% if not more vs the euro. This will happen almost immediately.
2. Import/export charges/customs will be introduced until they can negotiate new trade agreements. This will be a long process, but it is anybody’s guess how fast this will happen.
3. No idea about VAT.

Interesting that you've no idea about the effects of VAT. VAT is going to be your biggest issue.

The British are unlikely to abolish VAT so it means that your customers will be liable for it. Now consider how you feel when the postman/courier knocks on your door with a parcel demanding another 23%. If your products are of any substantial value they're going to get caught in customs adding to the delivery times, and while most businesses make the adjustment by simply ordering earlier to ensure on time delivery, consumers want it yesterday. Customs delays will be your first hurdle; customers getting hit with VAT bills on the doorstep will be next.

You'll need to get a plan in place pretty quickly if they vote to leave, because I'd say you're going to see a substantial drop in UK customers.

SnipSnop

DubTony wrote: »

Interesting that you've no idea about the effects of VAT. VAT is going to be your biggest issue.

The British are unlikely to abolish VAT so it means that your customers will be liable for it. Now consider how you feel when the postman/courier knocks on your door with a parcel demanding another 23%. If your products are of any substantial value they're going to get caught in customs adding to the delivery times, and while most businesses make the adjustment by simply ordering earlier to ensure on time delivery, consumers want it yesterday. Customs delays will be your first hurdle; customers getting hit with VAT bills on the doorstep will be next.

You'll need to get a plan in place pretty quickly if they vote to leave, because I'd say you're going to see a substantial drop in UK customers.

Ah trust me we know all about VAT/Taxes/Customs issues as we have been at this for 12 years at this stage. Try dealing with canada / australia. Fun and games. . Since we are already including VAT in our current prices, it will be a case of putting UK VAT aside and deal directly with Fedex on this.

But fingers crossed they stay. Going to be yet another bucketload of red tape to deal with in case of leave.

VincePP

Bookies

1/12 to stay
7/1 to go

estimating a 58% in favour of staying.

That would be considered a resounding vote of confidence in UK staying

jimmii

VincePP wrote: »

Bookies

1/12 to stay
7/1 to go

estimating a 58% in favour of staying.

That would be considered a resounding vote of confidence in UK staying

Wow those odds have dropped massively for stay. I never really considered that it would actually happen then last night the subject came up ay the gym and everyone said they were voting to leave. I was wtf! I was thinking it would be a bit of craic to see what happened if leave one but as an exporter to Europe it certaymakes life easier to stay.

_Brian

Well lads the deal is done.

I've been told it will be a two year process.
I don't think Cameran will be able to drag it out for fear of a backlash within the uk.

VincePP

jimmii wrote: »

Wow those odds have dropped massively for stay. I never really considered that it would actually happen then last night the subject came up ay the gym and everyone said they were voting to leave. I was wtf! I was thinking it would be a bit of craic to see what happened if leave one but as an exporter to Europe it certaymakes life easier to stay.

I had $5million at 7/1 - whoops, this is not the betting thread where no-one ever had a losing bet

Overall I don't think there will be as big an issue as people were saying. Its not as if the loonies have taken over. (yet) Conservatives are sill in power.

UK will stay part of EFTA (european free trade area), so good s will move freely.

It will mean paperwork and it will mean vat on UK imports for businesses at import date - for me that will mean a negative cashflow change as most of my goods are imported from UK - not a huge concern, but will just plan orders closer to end of vat periods for minimal affect.

In any case nothing will change for at least 2 years - some are saying 5-7 years before an offcial exit. So absolutley no need to panic or worry in the short term. Even the currency markets have calmed down already after just 2 hours.

pedroeibar1

The result is not unexpected and the ‘remain’ campaign (does it merit that word?) was an example of why that side lost.

The small guy is not interested in grandiose notions like inward investment, trade treaties, etc. S/he needed to be told basic things like “Leave and” - “Your money will be worth 10-20% less when you go on holidays” and “If you get sick when living/holidaying abroad you will have to pay” and “If you buy anything from overseas on eBay/whoever, it will be like buying from the US, you will have to pay duty & other taxes” and “If your employer is involved in exporting, the amount of paperwork and hassle will increase dramatically”. Finally, in big letters for the immigration voters, they should have been told “France will no longer protect our borders at Calais, it will be up to us to have patrols along our south coast.” (Expect a surge in boat thefts on the French side.)

Cameron was bad, Corbyn was worse and it is a disgrace that neither called Farage out on his dishonest arguments (e.g. NHS). The far Right, like the far Left here have no notion of economics yet they continue to be allowed waffle on with their economically bankrupt notions.

The EU will take a firm-ish stance, the UK is a big market and needed, but an example must be made….. The UK will not have the easy ride they expect, both on timeframe and trade allowances.

So, Ireland will get over it. FDI will increase, big companies with UK export exposure will take a whack but will recover, SME’s will take a knock for a while as the UK is their main market but remember the demand for the product will remain and it will be as complicated/expensive for the Brits to buy from any other Eurozone country. Tourism here will also suffer as the Brits will still return but not as frequently and not stay for as long. Bad debts will increase as many UK companies have become reliant on a strong sterling and are not yet prepared for what will happen, so the UK company failure rate will rise. Irish co. failures will rise also as their product prices will be undercut. As a result there will be a weeding-out process of Irish SMEs, the better ones will become bigger and stronger, those that do not act will disappear. Website designers should see an upturn in business, along with language professionals as demands to grow other markets increase.

Sadly Ireland has neither politicians (bar a very few) nor civil servants capable of turning this opportunity into a success. They will waffle on about the Border; forget about the Six counties, it is an irrelevance!

anotherfinemess

So we'll all stop buying from the UK and maybe Amazon and the likes will relocate over here. God knows we could do with the jobs

_Brian

Time will tell..

I expect in time an increase in the cost of goods I import, may look to mainland Europe as an alternative..

But, much of what I compete with is shipped in from the UK, with vat added at the border it should be swings and roundabouts (i hope)

We're only small and units shipped are small but if we can keep hanging in there we should be ok..

VincePP

It could be a big plus for online retailers here as vat will be applied at point of entry for good originating in UK. Many UK websites won't be set up to sell excluding UK vat. Some like Amazon will continue as they ship from anywhere but apply Irish vat rates.

So except for the big sites that are registered for vat in Ireland, goods from UK may have double vat (Uk & Ireland) + duty + paperwork (I've sent a few items to Norway and its a pain in the ass). Shipping from France / Germany is expensive, so that option won't be good, hence Irish online retailers will find that many of their UK competitors won't be competing with them any more.

Yippee

Gloomtastic!

The return of Duty Free!

pedroeibar1

pedroeibar1 wrote: »

The result is not unexpected and the remain campaign (does it merit that word?) was an example of why that side lost.

The small guy is not interested in grandiose notions like inward investment, trade treaties, etc. S/he needed to be told basic things like Leave and - Your money will be worth 10-20% less when you go on holidays and If you get sick when living/holidaying abroad you will have to pay and If you buy anything from overseas on eBay/whoever, it will be like buying from the US, you will have to pay duty & other taxes and If your employer is involved in exporting, the amount of paperwork and hassle will increase dramatically . Finally, in big letters for the immigration voters, they should have been told France will no longer protect our borders at Calais, it will be up to us to have patrols along our south coast. (Expect a surge in boat thefts on the French side.)

Cameron was bad, Corbyn was worse and it is a disgrace that neither called Farage out on his dishonest arguments (e.g. NHS). The far Right, like the far Left here have no notion of economics yet they continue to be allowed waffle on with their economically bankrupt notions.

The EU will take a firm-ish stance, the UK is a big market and needed, but an example must be made .. The UK will not have the easy ride they expect, both on timeframe and trade allowances.

So, Ireland will get over it. FDI will increase, big companies with UK export exposure will take a whack but will recover, SME s will take a knock for a while as the UK is their main market but remember the demand for the product will remain and it will be as complicated/expensive for the Brits to buy from any other Eurozone country. Tourism here will also suffer as the Brits will still return but not as frequently and not stay for as long. Bad debts will increase as many UK companies have become reliant on a strong sterling and are not yet prepared for what will happen, so the UK company failure rate will rise. Irish co. failures will rise also as their product prices will be undercut. As a result there will be a weeding-out process of Irish SMEs, the better ones will become bigger and stronger, those that do not act will disappear. Website designers should see an upturn in business, along with language professionals as demands to grow other markets increase.

Sadly Ireland has neither politicians (bar a very few) nor civil servants capable of turning this opportunity into a success. They will waffle on about the Border; forget about the Six counties, it is an irrelevance!

I see it as a big opportunity for Ireland. I can't understand the pessimism in the media, I feel like its kind of a leftist sham. However your point about the quality of politician not being able to take advantage of such opportunities of FDI, and companies of the likes of Vodafone Group HQ relocating to Ireland (the kind of thing I imagine happening with a lot of major corporates) is indeed a worry. With some smart people in charge this is really a chance for Ireland to pillage big business from the UK and instigate a huge rise in employment of high quality jobs in the country.

pedroeibar1

Deleted User wrote: »

........ With some smart people in charge this is really a chance for Ireland to pillage big business from the UK and instigate a huge rise in employment of high quality jobs in the country.

Have you heard the inane rubbish, clichés and platitudes of our politicos since my post? Totally out of their depth. Paschal Donohue ( a career politician, a graduate of the Seanad) nauseatingly annoying yesterday on “Our special relationship with Britain” and the need for “ease of cross border travel?” Many of us are old enough to remember our special relationship and cross border travel with a separate and out-of-the-way checkin/departure ‘terminal’ at Heathrow, complete with strict border controls, armed CID officers, sniffer dogs and hard stares. Not to mention teenage squaddies with fingers on triggers at Newry. And that was for those in suits! We got used to it, business was done. Get over it Paschal/Enda/whoever, our special relationship is with the EU and the US, not an island half full of uneducated Luddites .

Ireland finally could become a proper corporate hub, even a base for R&D – look at the graduate voting profile – all the UK top university towns were heavily ‘Remain’. Young educated people want to be with like-minded others (think Google). We need to increase funding the IDA to get them out there with roadshows.

Although Morgan Stanley has denied a move, I had a text from a mate Saturday saying “This time two years my job will be in Dublin or Frankfurt. And I’m not moving to Frankfurt!” Britain’s Leave campaign and its big red bus advert of £350 million a week paid to the EU amounts to £18 billion p.a. (A lie they now admit.) The drop in the stock market was £200 billon. That’s 11 years contributions just there, (not to mention a 31 year low for the £ and a ratings downgrade!) Foot. Shooting. Nice one Boris.

The big question is who will pull the plug and how forceful the EU will be on timing. There is a certain “F them” attitude in Bruxelles, a wish to see them suffer a bit, payback for decades of arrogance. Thankfully that’s tempered by the reality of needing a market that size within the EU. Nobody will want to be PM, s/he who is forced to assume that mantle will waffle on about Britain’s unpreparedness, etc, , so a general election and probably another referendum, the answer being a ‘Remain’. Bye-bye Boris and Corbyn.

Hopefully all the uncertainty will force the lower end of the Irish SME sector to examine exporting to non-English markets more closely.

VincePP

Deleted User wrote: »

I see it as a big opportunity for Ireland. I can't understand the pessimism in the media, I feel like its kind of a leftist sham. However your point about the quality of politician not being able to take advantage of such opportunities of FDI, and companies of the likes of Vodafone Group HQ relocating to Ireland (the kind of thing I imagine happening with a lot of major corporates) is indeed a worry. With some smart people in charge this is really a chance for Ireland to pillage big business from the UK and instigate a huge rise in employment of high quality jobs in the country.

Initially I looked at it that way, buy over the weekend I was with a couple of people who export to UK and employ over 20 staff. Currently over 50% of their production goes to the UK, less than 20% here and the rest elsewhere in Europe.

For them and a huge number of manufacturers its a worrying time and they have about 2 years to come up with a solution.

I think a lot of people here and particularly in the UK don't realise that the UK has been part of Europe since 1973, so we're really into the unknown.

In an ideal world the current UK government will collaspe, labour will get a new leader, new election and Labour going on a "2nd referendum" policy. A few changes to rules about freedom of movement of people and UK votes to stay.
In an ideal world I'd also win the lottery when I buy a ticket!

Big business will always find a way to "fix" a problem as even a cost of 100k would not be significant. Small business on the other hand (and there are thousands who depend on the UK) don't have the scale.

VincePP

VincePP wrote: »

Deleted User wrote: »

I see it as a big opportunity for Ireland. I can't understand the pessimism in the media, I feel like its kind of a leftist sham. However your point about the quality of politician not being able to take advantage of such opportunities of FDI, and companies of the likes of Vodafone Group HQ relocating to Ireland (the kind of thing I imagine happening with a lot of major corporates) is indeed a worry. With some smart people in charge this is really a chance for Ireland to pillage big business from the UK and instigate a huge rise in employment of high quality jobs in the country.

Initially I looked at it that way, buy over the weekend I was with a couple of people who export to UK and employ over 20 staff. Currently over 50% of their production goes to the UK, less than 20% here and the rest elsewhere in Europe.

For them and a huge number of manufacturers its a worrying time and they have about 2 years to come up with a solution.

I think a lot of people here and particularly in the UK don't realise that the UK has been part of Europe since 1973, so we're really into the unknown.

In an ideal world the current UK government will collaspe, labour will get a new leader, new election and Labour going on a "2nd referendum" policy. A few changes to rules about freedom of movement of people and UK votes to stay.
In an ideal world I'd also win the lottery when I buy a ticket!

Big business will always find a way to "fix" a problem as even a cost of 100k would not be significant. Small business on the other hand (and there are thousands who depend on the UK) don't have the scale.

The uncertainty is definitely a worry - however my feeling is that conditions for exporting are going to be made to remain the same or they might actually improve for Irish business. I reckon the fallout from making it worse to trade with Britain would be too much politically and be consistent nasty publicity no party could recover from. Maybe I'm too naturally positive on this or I'm missing something, but I just don't see how the Brits can put in worse trade terms then the current. Surely they have to be looking at better ones.

In terms of travel, hullabaloo over passports etc is nonsense as you point out Pedro. I have to show my passport when I go to England last time I checked. I also need Sterling currency. So no difference there other then I can get more bang for my buck now.
I suppose the devaluation of Sterling will present some potentially lower orders for Irish exporters though, a dip in trade could well put a few SME's out of business if they arent ready for it.
I wonder how long Sterlings problems will last, and surely Boris has a plan to make this happen quick and not let the currency continue to suffer because of uncertainty....

pedroeibar1

Deleted User wrote: »

The uncertainty is definitely a worry - however my feeling is that conditions for exporting are going to be made to remain the same or they might actually improve for Irish business. .....
I wonder how long Sterlings problems will last, and surely Boris has a plan to make this happen quick and not let the currency continue to suffer because of uncertainty....

Boris appears to be lost and it seems does not have a plan, as he was totally wrong-footed by Cameron who, contrary to promises, did not invoke Article 50 and left that for his successor. The PM role is now a poisoned chalice. The £ will be very volatile, it is lower now that at c.o.b. Friday, when it fell off the cliff.

I agree with you on orders, I don't see a fall-off in orders to Irish firms in the short to medium term. Brit importers will still need product and a devalued £ will mean it is the same cost everywhere. For example, were I a PCB manufacturer it would be very difficult for my customer to replace me quickly and a French or Singaporean supplier's prices would be the same due to the value of Stg. A good time to get closer to the customer. SME’s need to examine their credit terms, making sure that nothing can fall through the cracks of a Brexit.

Talk of travel visas, right to work, residence, healthcare etc., is all nonsense, none of that will be affected. It will be the ancillary things that will affect SMEs the most – a weakened English/Welsh economy following Brexit, along with a concomitant recession would lead to a higher incidence of English business failures so increased risk of bad debts for our exporters. Credit control in SMEs needs to pay more attention to DSO, adherence to limits/terms. Another ancillary for example is insurance, as currently most of the EU insurers are ‘passported’ into Ireland under the Freedom of Services Directive. That cannot happen for the Brits once Brexit occurs and no Brit insurer would capitalise a new insurance company here, the Irish market is too unprofitable and inconsequential to do that, so less competition so higher premiums.

Legally the task will be huge – much of the UK’s law is EU based (compliance with Directives) so what will they keep or reject? Bit odd really if they quit and then keep EU law!

Few if any of these questions were asked by the UK media, who, like the Establishment (and much of the electorate) sleepwalked into the referendum.

Ireland is on the side-lines, we can look for stuff but we have no power to do anything ourselves. Posturing by Enda and his lads will not do anything. Germany, France and to a lesser extent Italy will be calling the shots. Our politicians should be concentrating on the important issues, like attracting inward investment - Scotland always was a big competitor and now is likely to become a bigger one. We need to get our act into gear.

gargargar

pedroeibar1 wrote: »

The result is not unexpected and the ‘remain’ campaign (does it merit that word?) was an example of why that side lost.

The small guy is not interested in grandiose notions like inward investment, trade treaties, etc. S/he needed to be told basic things like “Leave and” - “Your money will be worth 10-20% less when you go on holidays” and “If you get sick when living/holidaying abroad you will have to pay” and “If you buy anything from overseas on eBay/whoever, it will be like buying from the US, you will have to pay duty & other taxes” and “If your employer is involved in exporting, the amount of paperwork and hassle will increase dramatically”. Finally, in big letters for the immigration voters, they should have been told “France will no longer protect our borders at Calais, it will be up to us to have patrols along our south coast.” (Expect a surge in boat thefts on the French side.)

I don't think it would have mattered what was told to leavers, I see the vote as the result of people's complete loss of faith with current politics. It seems to be the case across most of the western world. The result is the the rise of fringe parties and candidates. Most working class people now feel that the whole establishment is not working in their interest and are rolling in behind demagogues.

pedroeibar1

No doubt there was a bit of that, same as the support for Trump and the Tallaght anti-everything brigade. But the Brexit message was not got across; just read the comments on the Mail, Sun, etc articles. No idea, but that is going towards Politics, so not for here.

pedroeibar1

Forget bread runs, milk runs, board games and 'entitlement' to grants/free money. This has not raised its head on this forum for more than 3 months and is what people should not be ignoring.

_Brian

Short term buying power is good but all the talk of EU taking a hard stance regarding trading rights is what I would expect.
I can't see a sweetheart deal being done for fear of a domino effect of others looking for similar arrangements.

duploelabs

Even the currency fluctuation and devaluation of the sterling is going to wipe out any small producer that relies on their export trade to the UK, I know that's a contradiction in terms....

Walter2016

duploelabs wrote: »

Even the currency fluctuation and devaluation of the sterling is going to wipe out any small producer that relies on their export trade to the UK, I know that's a contradiction in terms....

With sterling over 90p, there's going to be a lot of pain for Irish exporters and also retailers within an hour of the border.

And it doesn't work in reverse as many UK companies invoice in Euro and won't sell in stg to clients outside UK, so its a crazy time out there for many and scary for anyone who has UK as their main export market.

The Brits are thinking they will be better off, but with many raw materials priced in US Dollar, consumer inflation will soar in the UK.

mrawkward

Poor response due to any exporter who is really affected by the meltdown of sterling is losing so much on current sales, they have no appetite to post on here. SMEs can never hope to swallow even half the value loss on currency that has actually materialised so far.

What really scares me is Irish political focus is on the North, their legacy, but the trade numbers confirm that the North needs us but they are small beer to us compared to mainland UK. political expediency will always win out.

Gloomtastic!

Is this an example of things to come or just an isolated industry....

An estimated 90pc of mushrooms (70,000t), worth €120m, produced in Ireland are exported to the UK - accounting for 52pc of the UK mushroom market. There are currently just below 60 mushroom producers in Ireland, with a total workforce of 3,500, mostly located in rural areas,

From this morning's Indo. 3 producers have already closed since the Brexit vote.

My first job 40 years ago, when I was about 10, was in a supermarket. One of my abiding memories was that the price of fruit and vegetables changed with the weather but mushrooms always stayed the same price -
IR£1.10 per lb IIRC.

Looking at the price today, it looks about the same - about €3 per kg.

Walter2016

Gloomtastic! wrote: »

Is this an example of things to come or just an isolated industry....

the mushroom market is an extreme example because it depends so much on the UK market. the smaller operators who just have Irish operation and who are reliant on the UK are most at risk.

The biggie in the industry is Monaghan Mushrooms, but they are operations in UK and mainland Europe as well, so whilst they may curtail opertaions here, it probably won't affect the company as such, but more the local workers.

It will be the food indutry that gets affected more than most because their raw material and labour costs are mostly local and if the retail price has to rise in the UK, then the number of units sold will drop and UK retailers will replace them with other suppliers.

Retailers within an hour of the main border towns will also be hit - Dundalk, Letterkenny & Sligo especially if the rate stays at 90p. Under 85p and its less effect due to the value peope put on time and also that traffic situation in Newry / Enniskillen would put many off if the savings are small.

antoinolachtnai

Where are these alternative suppliers for U.K. retailers? How fast can uk agricultural production ramp up?

mrawkward

It is clear that if the current exchange rate trend continues, many SMEs exporting to the UK will be losing their shirts long before the actual Brexit event. Nett margins of say 5% can never sustain a 15%+ fall in sales value. Much food business is done on forward contracts which bar price increases over the term. The outlook is bleak, the only hope is added value products and new EU markets for most.