The pound has fallen to its lowest level in more than 30 years against the dollar following the UK’s vote to leave the European Union. It has been one of the most noticeable consequences of the BREXIT result.
We undertook a mini survey to understand the impact that Brexit has on companies in the Food Packaging and Food Manufacturing Sectors and the issues and challenges these businesses are facing as a result of it.
Respondents of our survey mentioned that for most of them the decreasing value of the pound meant that it would be more expensive to import products from outside the UK which has a direct effect on margins. On the upside it would be cheaper to export products from the UK to Europe.
Respondents also mentioned that it would be more expensive to source raw materials from outside the UK. This is of particular importance for businesses in the food packaging and manufacturing industry as it becomes more expensive to maintain their existing supply chain.
The survey shows that one of the main priorities for businesses in the food packaging and food manufacturing sector is to alter the supply chains.
Companies must develop or revise their plans to improve the supply chain. They have to determine how BREXIT will lead to an alternative sourcing model as well as identifying which trading countries could be more strategic than others.
According to respondents of the survey another top priority is changing their business strategy. How does the post-BREXIT era impact their business and how should they respond to it? What changes do they need to make to their long-term business agreements?
Businesses feel that the media reporting led to business uncertainty and thereby created a lack of confidence amongst consumers. However, it’s not all doom and gloom. A positive impact for the economy is that companies can potentially increase their market share by bringing back manufacturing to the UK from the continent.