Saturday 21 September 2019

UK withdrawal piles costs of €100,000 on exporters

Tánaiste Simon Coveney. Photo: Reuters
Tánaiste Simon Coveney. Photo: Reuters
Ellie Donnelly

Ellie Donnelly

One in ten Irish indigenous exporters say the UK's imminent departure from the European Union has already cost them more than €100,000.

A survey by export industry support agency Enterprise Ireland found that almost 5pc of its clients had been hit with costs of more than €250,000 by Brexit.

With 56 days until the UK is due to leave the EU, uncertainty around what exactly that exit will look like continues.

Yesterday Tánaiste Simon Coveney told reporters that any businesses not planning for a no deal were "naïve".

"Should it happen, if they have missed the opportunity to prepare for that [no deal scenario] they need to be confronted with the reality that Brexit means change for the business environment," he said.

Minister Coveney added that there are more than 3,000 companies which last year had trade of more than €100,000 with the UK that still have not got an EORI exporting number.

"That's madness for those businesses and they should do it," he said.

Ahead of the Enterprise Ireland International Markets Week currently taking place in the RDS, currency fluctuations were cited by businesses as the biggest concern ahead of Brexit.

This was followed by tariffs and possible supply chain disruption.

"Our research shows Irish exporters are already feeling the negative impacts of Brexit through their profit margins," said Julie Sinnamon, CEO of Enterprise Ireland.

"We have consistently said that the wait and see approach is not an option and client companies are heeding this advice.

"Overall, Enterprise Ireland client companies have opened 275 new overseas presences in the first six months of 2019."

Of the 650-plus businesses attending the event, which provides them with access to more than 140 advisers from Enterprise Ireland's 34 overseas offices, more than 80pc of firms identified the eurozone as the market they are planning to expand into over the next year.

Key factors behind venturing into this market were its size and growth potential, as well as "a proven demand for a product or service", according to the survey.

Responding to whether or not it would be feasible for smaller businesses to look at exporting beyond the UK, Ms Sinnamon said Enterprise Ireland had worked with businesses to help them understand the issues associated with entering new markets.

However, Ms Sinnamon would not be drawn on whether the agency expects to receive increased funding in October's Budget, saying only that the Government understands the needs of its clients "and will respond accordingly".

Enterprise Ireland is encouraging its clients to explore markets beyond the UK but it still remains the most popular destination for Irish exports.

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