EU Businesses Severing Ties with UK Suppliers
Almost half of EU businesses already looking to cut ties with UK suppliers according to the latest survey of more than 2,000 supply chain managers by the Chartered Institute of Procurement & Supply (CIPS)
- 32% of UK businesses who use EU suppliers are looking for British replacements
- Nearly half (46%) of European businesses expect to reduce their use of UK suppliers
- 36% of UK businesses plan to respond to Brexit by beating down supplier prices
- The UK’s “weak negotiating position” is seen as the biggest hurdle in trade talks
Almost two thirds of UK businesses said they have seen their supply chains become more expensive as a result of the weaker pound, with 29 per cent re-negotiating some contracts as a result.
Gerry Walsh, CIPS chief executive, said: “Diplomats either side of the table have barely decided on their negotiating principles and already supply chain managers are deep into their preparations for Brexit.
“Both European and British businesses will be ready to reroute their supply chains in 2019 if trade negotiations fail and are not wasting time to see what happens.
“Fluctuations in the exchange rate or the introductions of new tariffs can dramatically change where British companies do business. The separation of the UK from Europe is already well underway even before formal negotiations have begun.”
In the long-term, European supply chain managers appear more confident about their ability to respond to any new tariffs by moving their supply chains within the single market.
Almost half (46 per cent) of European supply chain managers expect a greater proportion of their supply chain to be removed from the UK, with 28 per cent intending to bring back all or part of their supply chains to Europe.
While European and British supply chain managers agree that the number one priority for negotiations should be keeping tariffs and quotas to a minimum, the UK supply chain managers responsible for brokering international deals for their organisations believe negotiators face serious hurdles. See the full CIPS article.
“Fluctuations in the exchange rate or the introductions of new tariffs can dramatically change where British companies do business. The separation of the UK from Europe is already well underway even before formal negotiations have begun.”
In the long-term, European supply chain managers appear more confident about their ability to respond to any new tariffs by moving their supply chains within the single market.
Almost half (46 per cent) of European supply chain managers expect a greater proportion of their supply chain to be removed from the UK, with 28 per cent intending to bring back all or part of their supply chains to Europe.
While European and British supply chain managers agree that the number one priority for negotiations should be keeping tariffs and quotas to a minimum, the UK supply chain managers responsible for brokering international deals for their organisations believe negotiators face serious hurdles. See the full CIPS article.