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Brexit Transition Plan

Are you tired of hearing about Brexit and yet another meaningless deadline? There’s a danger that we begin to believe that our businesses will not be impacted or expect our governments to protect our markets. There is a Brexit fatigue and many will simply wait until there is clarity on the Brexit Transition Plan by the end of 2020. You can be sure of one thing: there will be winners and losers in your market sector.

The risks and the opportunities for your business can vary depending on the what factors may change the markets over the coming years. Over the coming years, there will be new companies in the market ready to make the best of Brexit uncertainty and win new business. There will also be companies who will feel the impact more than others, due to their exposure or over-reliance on either suppliers or customers crossing the Brexit fault-line.

When creating your company’s Brexit Transition Plan, where do you feel your market sector will change over the possible changes over the coming three years?

Three Market Factors can have market changing implications for some sectors:

  1. Introduction of Customs Filing and Border Inspections

Customs filing and border checks will add administration costs and logistical delays that will immediately impact business costs, operational efficiencies and competitiveness. Many cross-border businesses will become non-viable if customs border checks are introduced. This will have particular impact on small businesses.

Companies will be forced to seek new suppliers and larger providers will likely be better placed to spread the costs of the changes.

  • Changes to Import Tariffs into the UK

This could be adding tariffs to goods from the EU or reducing current EU tariffs on goods from outside the EU.

Britain will have tariffs as an economic tool to favour goods and products produced in its own country.  Any changes in import tariffs will change the dynamic of that sector, boosting some producers while penalising others.

Britain will have new trade agreements with China and the USA, as examples, with likely changes to import tariffs in particular product areas. This will result in market changes.

  • Changes to the UK’s Regulations from current EU-wide Regulation alignment

How will the UK decide to align its regulations across many areas, from financial regulations, chemicals, goods quality certification and many more?

A product being exported today from the UK to the EU may not be permitted due to not being EU certified. Would the UK decide to change some of its regulations away from EU alignment for trade deals with other markets?

The UK is leaving the EU to have more autonomy and control of its own policies. For importers into and exporters out of the UK, how will the three market factors discussed above impact your business? Can we trust that any changes will be come will plenty of notice giving the industry time to respond?

When the changes do come, some companies will be better placed to take advantage than others. Some companies will be better off, and some will be worse off. There will be winners and losers.

To help you be on the winning side, we’ve prepared a quiz tool to provide you with an appropriate Brexit Transition Plan. Click here to get access to Your Brexit Transition Plan.

5 messages:

  • Your market will change, as Brexit will very likely change one or more of these 3 factors. Get your plan here
  • Can your business manage these 3 market factors impacted by Brexit? Get a plan here
  • Brexit will change these three factors. What is your transition plan?
  • Bumpy road ahead, have you a plan to avoid these three Brexit changes? Get your transition plan
  • Brexit breaking market alignment on these three factors. What is your transition plan?


I may regret this! The words ‘Brexit’ and ‘Prediction’ should not be used in the same sentence. The one thing we learned since the 2016 Referendum is you never know what is around the corner. Even now, 20 days before the UK finally leaves the EU, there is that small chance that the Withdrawal Agreement is not signed due to the many approvals required yet, plus the risk that Dominic & Boris, well, do a Boris on it! Hopefully not.

Hopefully the UK leave as planned now on January 31st, starting the transition period (due to end on December 31st) and finally the facts of Brexit should emerge as opposed to the rumours and risks batted about over the last 3 years. Some businesses may not like the outcome, but at least in 2020 we can start planning with certainty as the shape of EU-UK customs, regulations, borders, logistics, VAT treatment, security controls etc. emerge from the comprehensive and ambitious negotiations.

So to those ‘crystal-ball’ predictions (which will make interesting reading on the 1st of January 2021!);

  1. “Backstop” is replaced by “Frontstop” (as a raft of new jargon emerges)

For the past 3.5 years, we have been introduced to terms such as the Article 50, Backstop, Divorce bill, Yellohammer and the Withdrawal Agreement. Now that we enter the Transition period, a new wave of Brexit jargon will emerge such as bilateral trade, general agreement, tripartite, ratification period, zero dumping etc., plus many more yet to be baptised.

Strategic Sourcing Tip;

These terms will filter through the media, and deciphering them won’t be everyone’s cup of tea. Therefore, be armed with accurate and factual sources of Brexit Information such as the;

  1. Brexit Risks migrate from No Deal to No Agreement

With the threat of “No Deal” hovering over many businesses in 2019, the imminent approval of the Withdrawal Agreement by the UK and EU Parliaments, is a welcome conclusion to this matter. However, do not dump your No Deal Brexit Plan yet as the likelihood of a No Free-Trade Agreement outcome in 2020 is highly likely for the following reasons (plus many more which exist);

  • The time-frame is first major problem. The Transition Period will expire in 11 months and it will take 2-3 months at the end to ratify the Free-Trade Agreement. Therefore, there are at most 9 months to deliver the most “comprehensive and ambitious agreement” ever seen by the EU. To provide some context, the original Transitional period was conceived of as 21 months, itself thought too short by virtually all experts. Expect many gaps or grey areas in this 9 month production.
  • Time and resources prevent the success of most projects. Human resources, expertise and knowledge are lacking in the UK to undertake this mammoth task (FTA negotiation). Notwithstanding what we have learnt about the UK’s negotiation capabilities over the past 3.5 years, their exit from the EU next month means all EU-negotiated privileges with third-countries disappear also, which will require negotiation time and resources from the UK civil service to recuperate, while they separately debate with Barnier, Hogan & co. Just to note, these current EU-negotiated privileges with third-countries are captured in over 600 pieces of legislation of which the UK may have to re-build.
  • Convergence V Divergence. Most trade agreements have two entities trying to converge and work closer together. The UK unashamedly want to diverge, which is a lot more complex, more unusual and from an EU perspective, unprecedented. This simply adds another layer of complexity, while it must be asked does such ‘diverging negotiation’ expertise exist on either side of the table?

Strategic Sourcing Tip;

If you were to design a ‘perfect storm’ of negotiation hurdles, the above scenario would be pretty close. Therefore, do not expect a comprehensive resolution to this trading quandary in 9 months (presuming Boris does not extend this Transition Period as most experts recommend) and ensure your No Deal Brexit Plan is maintained as a UK crash-out is still very possible in January 2021.

  1. Phoenix rising from the ashes (those, Cash-for-ash ashes!)

After 3 Years, Northern Ireland has a Government again. Following the ‘cash for ash’ controversy which led to the collapse of its devolved Government in January 2017, the NI Government is back at a pivotal time in Brexit negotiations. As home to the only land border between the UK and the EU, Northern Ireland has been central to trade negotiations throughout. With the frontstop now in place, the reality is that the economic regime for Northern Ireland will be different from that of Great Britain.

Truth be told, the current Withdrawal Agreement should be good for NI as this cross-border location would seem to have privileges to access both markets, which is very attractive for FDI. However, the customs-free world of the past seems to be diminishing so expect trading costs to affect SMEs with customs administration, declarations and training required to overcome such paperwork challenges.

Strategic Sourcing Tip;

Rules of Origin specifics in the ambitious FTA will have a profound impact on the movement of goods in/out of NI, plus the associated paperwork which may be required. For our NI clients, it is highly recommended to identify, employ or up-skill a customs administration resource as Boris’s promise to NI businesses in November that “there will be no forms, no checks, no barriers of any kind”, is unrealistic and unviable.

  1. Virtual Border is where it is at

If you have a huge amount of optimism that a comprehensive FTA will emerge, then a No Deal on products is somewhat averted, but No Deal on services may be the trade-off for this. Trade within the EU is protected by a vast amount of legislation and regulation, which the UK is trying to escape from. It is common knowledge that Boris intends to be distant from the EU in all aspects of goods and services, including specific removal of the “high alignment” text from the Withdrawal Agreement, which Teresa May fought for. The renegotiation of non-tariff barriers to trade is much more important than tariff barriers, but politically less spoken about. However, the time has come in the Brexit journey for the discussions and realities to emerge about non-tariff barriers a.k.a regulations such as REACH, GDPR, food hygiene standards, financial services controls, environmental and social regulation, mutual recognition of standards and qualifications etc.

Strategic Sourcing Tip;

We at Arvo have always been more concerned for businesses on the island of Ireland about the divergence of EU standards and regulations in the UK/NI. Tariffs on goods would lead to cost increases, inflation and shortage of certain products in the worst case scenario. However, the lack of alignment of non-tariff barriers will cease the delivery of services (& some goods altogether). As the facts of this outcome emerge, we will continue to publish these insights so get them first from our Weekly Brexit Newsletter.

Brexit has not disappeared but now the true impacts of the UK’s 2016 Referendum decision will finally emerge.

Just so you know, Arvo have produced a Brexit eBook with practical strategic sourcing tips for Businesses to navigate the above Brexit Risks. We have gathered case studies, templates and many helpful tools and solutions to support your Brexit risk management, so order your free copy today via;

Finally, if you have any Brexit queries, feel free to email [email protected]ie for a prompt response (or call +353 (0)21-2362902)

Brexit Supplier Help

Over the past 12 months, the Brexit dial has moved ominously from safe ‘Soft Brexit’ impact to the unsettling ‘Hard Brexit’ scenario, with a worrying time more recently where it seems ‘No Deal’ is a possibility. Throughout this time, we have been working with businesses across the island, analysing their supply chain risks with feedback from the trenches including;

  • “My NI-based supplier is the holder of product authorisations under REACH” – Paint Producer, Cork
  • “Our supplier has a factory in Naas and Leeds – I presume our products are coming from Naas?” – Food manufacturer, Sligo
  • “Our biggest customer is also our biggest supplier, based in Bristol” – Aviation Maintenance, Shannon
  • “We have a UK agent who is the sole distributor for UK & Ireland” – Motor Factors, Carlow
  • “Our suppliers are in mainland Europe but it’s a bulky product shipped via the UK” – Wholesaler, Athlone
  • “I have just realised 80% of our raw materials comes from the UK or NI” – Cleaning Company, Leitrim

Brexit is another business risk and Arvo use strategic sourcing techniques to reduces costs and risks associated with Britain’s exit from the EU, while defining appropriate sourcing strategies so as there is minimal interruption to our client’s supply chain.

Arvo provide strategic sourcing consultancy and have delivered practical workshops & training, specifically focusing on Brexit supply chain risks and helping SME’s answer questions such as; 

  1. What suppliers will impact the business most if they cannot supply you tomorrow?
  2. Do you know what % of your goods and services are coming directly or indirectly from the UK/NI?
  3. Have you researched alternative non-UK suppliers?
  4. Are there contracts, licenses or regulations restricting your global sourcing strategies?
  5. Are you aware of the potential additional costs to import from Europe in terms of hubbing, customs, logistics partners, Minimum Order Quantities plus the impact on cash flow?

Therefore, let us know today how we can help build resilience into your supply chain for Brexit (& other Political, Economic & Technological events that may cause risks for your business in future).

The outcomes from an Arvo engagement include a Strategic Sourcing Plan, a completed Kraljic Analysis defining your strategic and bottleneck suppliers while we have also created a Sensitivity Analysis Tool to analyse how the different values for a set of independent variables (costs) affect a dependent variable (price/margin) under certain specific conditions (Brexit).

Take note of these Brexit Planning Tools and Resources, to reduce your Brexit exposure.

Finally, Arvo are working with Enterprise Ireland, InvestNI and Intertrade Ireland, who all have Brexit supports to help you on the journey to develop your contingency plan;

Contact Us or the agencies above to get support for your Strategic Sourcing Brexit risk

Brextension – Current Brexit Status

On April 10, 2019, the latest Brextension was formalised with the EU offering the UK a six-month Brexit delay, pushing the withdrawal date to Halloween. This six-month extension was a compromise solution which stopped the clock on a no-deal withdrawal occurring at the end of the first Brexit-extension in April 2019.

The UK agreed with the EU by extending Article 50 until October 31 2019 at the latest, whereby during the course of the extension, the UK will continue to hold full membership rights as well as its obligations. The EU has agreed that the extension can be terminated if the Withdrawal Agreement is ratified within the UK. If the Withdrawal Agreement is ratified by both parties before 31 October, the withdrawal will take place on the first day of the following month i.e. Brexit could occur on July 1st, August 1st, September 1st, October 1st or most likely October 31st (which incidentally is the only date on which a no deal exit could happen).

As the UK did not ratify the Withdrawal Agreement by the 22 May 2019, they were legally obliged to hold European Parliamentary Elections on May 24th.

Although Parliament has rejected leaving without a deal multiple times, no deal remains the legal default at the end of the extension period if a deal cannot be agreed. If the Withdrawal Agreement can be agreed, this offers a time-limited implementation period providing a bridge to the future relationship and common rules will remain in place i.e. businesses trade on the same terms as now until the end of 2020.

Contact Us ([email protected]) to get support for your Strategic Sourcing Brexit risk