Brexit cost one in ten Irish exporters more than €100k to date

Brexit cost one in ten Irish exporters more than €100k to date

The Brexit process has cost one in ten Irish exporters over €100,000 to date, reaching €250,000 for some.

A survey by Enterprise Ireland shows that over half of its client companies have seen an impact on their business due to the protracted wranglings as to what form Brexit will eventually take, with 10% being hit by costs totalling over a €100,000.

Meanwhile, just under one in 20 businesses have seen their business hit to the tune over €250,000 by Brexit to date. The primary concern for businesses - affecting a third of companies surveyed - is currency fluctuations on the back of the impasse.

The pound sterling fell dramatically in recent weeks as British Prime Minister Boris Johnson’s rhetoric pointed towards a strategy aimed at crashing the UK out of the EU without a deal.

Sterling then rose sharply against the euro and the US dollar yesterday in the run-up to a key vote in the House of Commons which saw anti-no deal forces win the right to control the debating timetable in Parliament in a bid to avert such a crash-out Brexit.

Enterprise Ireland, which launched its International Markets Week in Dublin yesterday, said it is actively encouraging its client companies to further their diversification plans away from the UK market, and that it is important they take action without delay.

Other major concerns listed include the impact of prospective tariffs, supply chain disruption, and the general uncertainty over a hard Brexit outcome. Julie Sinnamon, Enterprise Ireland’s chief executive, said that a wait and see approach to Brexit is “not an option” at this juncture. She said:

Our research shows that Irish exporters are already feeling the negative impacts of Brexit through their profit margins

“As we draw ever closer to the potential of a hard Brexit, businesses must continue to find new markets and to innovate their products and services,” she said, adding that to do so would be “good for business, irrespective of the outcome of negotiations”.

80% of businesses are now planning to extend their scope into new international markets over the coming 12 months on the back of Brexit, with the Eurozone area cited as having the most potential.

John McGrane, director general of the British Irish Chamber of Commerce, said that the results “are not surprising”.

“We have said all along that businesses need to be preparing, but we also have a great deal of empathy for the fact they don’t know what to prepare for,” he said. He added that currency risk is “not bankable”.

“It helps importers in the short term, but other costs will offset it due to consequent price changes and British exporters needing to charge higher prices.”

With forces opposed to no-deal in the British Parliament appearing to unite in recent weeks as the threat of a crash out becomes more real, Mr McGrane said that businesses are “encouraged by the fact people are continuing to work very hard to avoid that eventuality”.

“It is clear that a lot of people may want to leave, but not without a deal,” he said.

“There are no winners in this situation. Until clarity is restored then real and very significant costs will continue to be incurred by Irish businesses. There are no positives whatsoever to no deal,” Mr McGrane said. “Everyone is jeopardised by this, and Ireland is caught in the slipstream.”

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