What a seven days! Out of the EU and England out of the European Soccer Championships. Those pesky Vikings bounced us in 793 AD and 1223 years later repeated the dose. Grocery cartoonists have had a field day: “Imagine if we had been playing Aldi?”. To rub salted cod in the wounds, Iceland beat us in establishing a democratic parliament, too (930 AD). We’ve been good at inventing games (e.g. soccer, rugby, cricket, golf) and, then, enjoyed admiring those countries that excel at them! We didn’t invent the referendum but we should have done and shown the world how it can be used to establish the archaic sport of wall-building!
So, 7 days ago, the nation’s majority voted for BREXIT, after more than 40 years of being part of the EU (as it became). Mind you, Charles de Gaulle vetoed our membership of the European Economic Community in 1963 (he was still peevish about our Agincourt success in 1415). Let’s be honest, we’ve always been reluctant members which is strange as the English aristocracy invented the notion of a “Gentlemen’s Club”! But, we think the nation was genuinely surprised when they woke up on Friday morning to embrace BREXIT – and believe that many of the brexiteers really wanted to give that lot in Brussels a jolly good kick up the pants and, now, have a sneaking suspicion that we have contracted Munchausen’s syndrome (the predilection to do self-harm).
We don’t have much wisdom on the immediate implications of this historic decision. Plenty of analysts and pundits have said very little, but do have a peek at James Walton’s (IGD) views on the impact of Brexit on the UK grocery industry. Frankly, nothing much is going to happen in a hurry, but give consideration to factors such as:
- the resilient stock market has bounced back but forex rates may take longer to align – as a major food importer, a weaker pound may place upwards pressure on food prices for consumers and on imported ingredients for manufacturers, but UK exporters may give two cheers (better export prices but higher costs);
- the EU has a range of relationships with third countries that may suit or could be modified to suit us and them. Remember, too, that we run a £15 billion deficit with the EU on grocery trade and, so, we are hugely important trade partners for our European neighbours;
- of course, we can negotiate trade deals with countries and trading blocks that, currently, are covered by the EU but this will be a long and tortuous process and VERY taxing for our public servants who are a little out of practice in such dark arts:
- we are low-60’s% self-sufficient in food and, in an era where buying local/national has become de rigueur, there’s plenty of upside in our home market but, then, our home market is only 65 million rather than the 510 million in the EU;
- we’ve been surprised at the Brexit support given by farmers – taking close to half the total EU budget, direct financial support to farmers comprises a significant portion of total farm income of, in particular, smaller-scale producers. For them, may the UK national government be as munificent!
Is the future rosy or bleak?: likely, something in between. In part, it will depend on the performance of our political leaders and, as of right now, it’s difficult to be enthused with optimism! Our grumpiness reflects that, whereas by no means ideal, the EU has and does represent a political and economic front that is substantial and demands respect from other major world players. Even darker, imagine if the Brexit legacy was the break-up of the UK?! Both of us are or have been immigrants and firmly believe that fluid movement of labour can and does bring benefits to all. Anyway, take some deep breaths and get stuck in for the long haul. Our bet is that the UK food and drinks industry will be stronger and more resilient by decade end than it is now.
What of the football? Look, Miguel is Spanish and is still in denial that Spain has failed to reach the quarters and David is Welsh and thankful that his soccer team is having more success than his rugby team did in New Zealand. Onwards!