26 June 2016
Brexit, Steenbergs and the future
While I had been nervously expecting that Brexit result, it's not until you hear it that the impact really hits you. And while it remains a shock, we must look forward and deal with the additional risks that it throws at us, as well as seek out those opportunities that we have been told are on the horizon.
I voted for Remain for myself, for my children and for the business, and live in one of the few regions outside of Scotland, Northern Ireland and London that voted to Remain. Brexit will be narrow the opportunities for everyone, but especially the young. But we lost, that's democracy, and it's time to move on - you can't undo a result you don't like, because that's undemocratic, abuses the just rights of those that voted to Leave and makes a mockery of the British - and yet I really, really don't like this result.
So what to do. It's time to get down into the detail, and to hold those that pushed to Leave to deliver on their promises. But I expect there to be a wide gap between the promises and reality - few savings and no extra cash for public services nor it even appears cuts in immigration because the labour provided by Poles, the Latvians etc is needed. And we have many "Europeans" as relatives (my mum, aunts, uncles and cousins), friends and colleagues and we will do everything possible to protect us and them from any impact from Brexit, especially xenophobia.
But back to Steenbergs.
Firstly, as a food business that mainly sells into the UK, but largely imports raw materials and packaging from the EU and exports into the EU, as well as with India and Sri Lanka etc etc, I would like to know what the new legislation is going to be.
Why? Because the whole of Steenbergs' business is dependent on and completely based on primary regulation from the EU as is the UK food industry. There is effectively no UK food legislation. These regulations cover food safety, food labelling, food information, allergen declarations, organic imports/exports/manufacturing, food packaging, waste regulations, chemical residues in food whether from pesticides, mycotoxins etc etc. We're designing new packaging - what will the new UK labelling rules be? The current regulations are not onerous, are good and protect customers and the give us safe food to eat each and every day, and they work from Ireland to Romania.
Also, not only is food and drink the UK's largest manufacturing sector, but 75% of UK food and drink exports go to the EU (or £18.3 billion); the sector employs 3.8 million people, or 14% of all UK employment (IGD, 2015) - so how the UK government deals with this is vital for real people and their livelihoods.
When will this new legislation come into place and how will it differ?
Secondly, we want to continue to buy from the EU and sell into the EU. What are the terms of this trade deal going to be? What extra paperwork will there be? My accountant will want to know how to treat VAT, or even if our whole accounting package is now redundant. And so on and so on.
Ultimately, while the politicos say be patient. I cannot wait 2 years for the politicians to plan, negotiate etc as we have staff that need to know next week what this means for them, and our current investment plans must now be put on hold while we wait for the powers that be work it all out. We say get a move on.
Our suspicion is that the EU legislation will just become UK legislation and, for Steenbergs to be able to trade with our EU friends, we will need to meet EU rules and regulations for all the above (Soil Association, 2016). So what's it going to be. Our guess: it will be business as beforehand with some wrinkles from the new empowered Westminster government (ex Scotland), but (and here's the rub) Steenbergs and all but the smallest food businesses will still need to meet all (and we mean all) the EU food and packaging legislation, but our honourable friends in Westminster or our Eurocrats will not be at the negotiating table to determine what those rules are.
What will be the longer-term impact? Overall, I suspect not that much, except less control over how we run our business, plus a few extra hoops to jump through. That's less freedom and accountability, not more.
So let's get down to it, and make the best of what this new path throws at us. Finally, I doubt that I will ever forget those who took us down this wrong path.