Business leaders prepare for the Battle of Brexit

Leaders from well-known Irish enterprises share their thoughts on the opportunities and challenges in the years ahead.

Brexit-related challenges for businesses on the island of Ireland, according to a recent report published by Chartered Accountants Ireland, Customs and Brexit: Consequences and Costs, are many and varied. They include the land border, the administrative burden associated with Brexit, Ireland’s unique trade surplus with the UK, and cross-border trade with Northern Ireland. While solutions to these challenges remain elusive at this stage of the negotiation process, the Institute’s tax department has identified four key issues that would minimise damage to Irish and Northern Irish businesses trading with the UK and the EU post-Brexit.

First, the customs checks between the EU and UK as a third country post-Brexit should be designed to minimise delays at border controls; second, a programme of education and resourcing should be established to assist smaller businesses adapt to compliance with the Unified Customs Code and other compliance requirements following the departure of the UK from the Customs Union; third, EU institutions should consider providing a funding mechanism, at least in the initial years post-Brexit, to help Irish SMEs with the cash-flow implications of customs and VAT compliance on imports from the UK; and fourth, the creation of a mechanism that would preserve the main advantages of a Common Transit Area to the advantage of both EU member states and the UK post-Brexit.

As politicians, diplomats and other interested parties work their way through the negotiation process, businesses on the island of Ireland are forced to prepare for an uncertain future with a plethora of possible outcomes. We spoke to business leaders to get a sense of the challenges and opportunities they envisage in the months and years ahead.

Jack Teeling

Firm: Teeling Whiskey
Turnover: €13 million
Number of employees: 85

Jack Teeling, Founder of Teeling Whiskey Company, is fortunate in the sense that the UK accounts for just 5% of the company’s sales. He does have concerns for the overall drinks industry on the island of Ireland, however. Over the last 20 years, a highly integrated all-island food and drinks supply chain has evolved with large volumes of trade annually in finished products and products requiring further processing passing across the shared land border, he said. “For example, Diageo brews Guinness in Dublin but sends the liquid to Belfast to be canned or bottled before returning to Dublin to ship around the world. If there is a hard border, this will lead to significant challenges in supply chains for the large drinks producers
in Ireland.”

The fall in the value of the sterling has caused some ripples for the firm, and Jack is mindful that a significant and persistent reduction in the value of sterling could affect his firm’s competitiveness with regard to its Scottish counterparts. “We have noticed some of our European distributor partners having their heads turned by more affordable premium Scottish single malts over the last few months,” he said. “But our preparations are focused mostly on ensuring we maintain a strong domestic business and invest in building a strong expert business in the existing non-UK markets for Irish whiskey.”

Michael Dawson

Firm: One4all
Turnover: €265 million
Number of employees: 72

One4all’s Michael Dawson, who oversees a business with an annual turnover of €265 million, describes Brexit as “like Y2K all over again”. The most notable issue, he said, is the amount of time and resources being absorbed by Brexit which would be better spent on business development.

“Our challenge is to second guess how it will eventually unfold,” he said. “There are some obvious things high on our agenda: we are securing a second e-money licence as the one we currently hold is issued by the Financial Conduct Authority in the UK and may not be valid in Ireland following Brexit. Also, we will have to review thousands of contracts, all our terms and conditions and other compliance issues along with our treasury policy.”

Given that over 50% of One4all’s business is UK-based, the firm established a monitoring group shortly after the result of the vote was announced to assess the implications and oversee a smooth transition for the business. In Michael’s best case scenario, however, their plans will simply gather dust on a shelf. “The best case scenario is that our well-paid officials in the EU and the current political leadership in the UK would have the courage to find a way to put a stop to Brexit and look to resolve the real issues that brought this crazy decision about in the first place,” he said. “The worst case scenario is that the exit becomes very prolonged, resulting in years of uncertainty in the UK economy with knock-on effects in Ireland and across Europe.”

Gerry Butler

Firm: Airsynergy
Turnover: Not disclosed
Number of employees: 26

Airsynergy, a Longford-based innovator and manufacturer of cleantech products, faces a number of possible challenges arising from Brexit. From import/export barriers to substantial currency fluctuations and aggressive UK trade agreements, the firm’s CEO, Gerry Butler, has much to contemplate but the firm has made moves to position itself for Brexit – whatever that might be.

According to Gerry, the firm has looked to expand into new markets rather than depend on the UK economy. The firm’s manufacturing activity has also been outsourced to Flex, a global engineering and manufacturing company, to minimise the Airsynergy’s exposure to negative market shifts.

While Brexit has its downsides for the firm – notably the lack of confidence among multinational companies regarding their expansion plans, for example – the referendum result has pushed the company to focus on other European markets “as traditionally, the UK was our first port of call for expansion due to the proximity of
the market”.