Consumers across the continent still want British products, especially food and drink. Our range of premium tonics, mixers and soft drinks, Franklin & Sons, has seen huge success in Europe. Countries such as Belgium, France, Italy and Germany are buying hundreds of thousands of bottles every month.
Even since the EU referendum, we have increased the number of countries we are exporting to, and doubled our first-half unit sales year on year. The brand’s distinctive Britishness is driving sales and supporting British jobs.
However, Brexit uncertainty threatens this. Our distribution partners in countries like France and Italy are looking ahead and want answers about how export timescales and costs will be affected by Brexit. They want to know if their margins will be eroded and how quickly they can get perishable goods from Britain to retail in their local markets. These are questions we simply cannot answer at this stage.
The uncertainty is also affecting the economy, which in turn influences decisions businesses are making on a day-to-day basis, especially SMEs.
At Global Brands, we export to 55 countries internationally, including 26 EU member states. While the weak pound against the euro has helped us to expand into new markets as our products are more competitively priced internationally, we are net purchasers of euros so are getting less for our money.
Despite Brexit, the government is wanting to increase exports to £1 trillion per year by 2020. Currently, only 21% of SMEs currently export, so small firms are key to hitting this target.
Without the necessary support during Brexit negotiations, it will simply be unattainable. Margins could be eroded by import and export tariffs. Even small tariffs could prevent many small businesses exporting to EU countries.
As the owner of an SME with international reach, I’m concerned about the potential for major negative effects caused by the constant changes to UK and EU regulations. Our focus is still to create new international working relationships, but we don’t know how these could be affected by any new legislation. Any changes to tax structures and product classifications during the exit negotiations could also have a serious effect on the business.
Along with fears about escalating export and import tariffs, there is too much scaremongering and speculation about ports and borders becoming lorry parks for British business. Earlier this year a study by the Federation of Small Businesses found any additional checks and paperwork at borders would make international trade unattainable for smaller companies.
With the deadline of March 2019 for leaving Europe looming and Brexit talks essentially at a deadlock, businesses and policymakers should be working together for a solution that benefits SMEs and the UK economy as a whole in post-Brexit Britain.
If we can reduce this uncertainty and set out a clear plan, business leaders will be more confident in negotiating a solid path through the next 18-24 months.
Steve Perez, is the founder and chairman of Global Brands