How are small businesses in Wales gearing up for the potential of a no-deal Brexit?
On a visit to south Wales on Wednesday, International Trade Minister Conor Burns MP said he was “very confident” the UK and the EU would strike a trade deal either before or after the latest Brexit deadline on 31 October.
The EU is still Wales’ biggest export market by far, followed by the United States.
As a no-deal exit is looking more likely, we asked a craft brewery, a garden centre and a glazing company – who all either buy from or sell to the EU – how they were preparing and what they were hoping for.
‘Certainty is better than nothing, that’s the best we can hope for’
Sarah John, director of Swansea-based Boss Brewing, started out with a home brewing hobby but craft ale became a business four years ago. Boss exports to Europe, including France, Italy and Sweden, but also to Canada. It also has two bars.
“The real implication for us is exports, and our main concern is tariffs – what will they look like, how much will they be, how it will affect our price,” she says. “Will companies continue to trade with us, will we out-price ourselves? The free market was ideal for a company like ourselves looking to expand and grow.
“But also how much more difficult will trade be in terms of admin, actually getting the product there, how will it extend the time.”
She said she was positive about new markets and opportunities further afield.
“It’s dragged on – even now we still don’t know what [Brexit] will look like. The sooner we have clarity, certainty is better than nothing, that’s the best we can hope for.”
‘We’re flying at the moment’
Mike Harris, a manager at Pugh’s, has a nursery and two garden centres near Radyr, Cardiff and Wenvoe, Vale of Glamorgan. The family-run business employs 150 people.
“At the moment, it’s not affecting us too much – we’re flying at the moment as a business. Brexit will only affect us when we know if it’s going to be a deal or no deal.”
“We buy a lot of plants from Italy and Holland,” said Mike. “A lot of our material is transported by trailer, there may be delays at the ports with inspections – plant quality might suffer and that would have an impact, we shall see. I’m anticipating price will go up so we’ll have to pass that on.
“We’ve a network of nurseries around the country who do similar lines and products – the ball would be in their court, they might up their prices a little bit but I would say 85-90% of product we could find in the UK market”.
The weakness of the pound against the euro has been forcing prices up over the last year though and the company is monitoring it daily.
‘The glass is always half full’
Alan Brayley is chief executive of AB Glass in Swansea and acting president of Swansea Business Club. The glazing company he founded 28 years ago employs 40 workers directly and 20 sub-contractors.
It works with major construction companies, including on health and education projects. There are hopes of work for local companies for city deal projects, including the Swansea indoor arena. There has been an element of stock-piling of accessories used by the company. AB also imports some goods from America but any tariffs in the event of a no deal would also apply to his competitors.
“The glass is always half full,” he says. “Confidence is quite high. We’ve got the £1.3bn city deal in the region, with initiatives already happening. We mainly work in the health and education sector so if European funding stops overnight maybe the schools won’t get built, the universities won’t expand. I don’t think developers have got there quite yet in their confidence about what’s happening post-Brexit.”
“But I think the prime minister has started on a good note. Is it electioneering? It might be but he’s also saying some good things about a deal and a no deal. But I believe – and the business community in the region believes – we should leave with a deal.
“We need to leave, deal or no deal – businesses need certainty. The development we’re planning for a storage facility on this site is stalled – I’ve held it back and not given the commitment to finance it yet because of this uncertainty. My competitors are all going to be on the same playing field – there may be a slight lack of work but we’re going to be all based on the same ground level if tariffs are imposed on us. So I think we need that certainty – get out or don’t get out – but we need that certainty.”