Facing up to Brexit

Brexit
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Two weeks to go and still no one knows what the new European market will look like, says Billy MacInnes

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17 December 2020 | 0

After four and a half years of drama, the Brexit saga is finally coming to a close. We hope. At times, it’s seemed as if EU has been trying to negotiate an agreement with an adrenalin-junkie cursed with an attention span so short it makes a goldfish the epitome of grandmaster-like concentration.

In such circumstances, it is difficult to prepare for Brexit when it’s still unclear, with barely weeks remaining, what that Brexit will look like. One thing we can be sure of is that it hasn’t been the easiest trade deal in history. But whether it’s a no deal or a skinny deal, how prepared are channel companies in Ireland?

Mark McHale, vice president North-West for Arrow’s enterprise computing solutions business in EMEA, says with offices all over the globe “we are already well-versed in how trade is conducted between countries whose only arrangement is through their membership in the World Trade Organisation (the default in the event of a ‘No Deal Brexit’)”.

 

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The distributor has assembled a dedicated team “to deal with Brexit implications from the UK and EU perspectives in whatever form they take. Our goal is for our business and trade to continue as smoothly and with as few changes as possible, while recognising that the new regime will have certain effects on how we conduct business moving forward”.

Frazer Furlong, business services director at Ergo, admits the extent of Brexit’s impact is “hard to predict” but the company is prepared. As a services company, it is not likely to be as affected as others but “there will be impacts that have not been predicated and as such we continue to strengthen our core business so it has the resilience to cope with such challenges”.

His colleague, group chief operating officer Conal O’Donnell, reveals Ergo “will take control directly of its logistics for mainland Europe, this is due to our main distribution partner being based in the UK”. He believes the impact felt in early January will be minimal, adding “wider and more permanent impacts will take longer to trickle across and down the economy”.

Michael O’Hara, group managing director at DataSolutions, accepts it’s difficult to know definitively what will happen “as we (still) do not know what type of Brexit we are going to get! Also, there are a number of factors outside of our control like – the big one – how Ireland, the UK and the EU are going to deal with goods moving in and out of the UK in 2021. The one thing we know for certain is that there will be delays and there will be additional transport related costs”.

The distributor has “worked hard with all our vendors to put together what we believe are the best plans to eliminate disruption to the supply chain for all orders received from our reseller partners in a post-Brexit world.”

He believes the company “will be okay as the vast majority of our products come from outside the UK. Moreover, the IT industry is very buoyant at present with many businesses looking at digital transformation projects, moving to the cloud and securing their IT environments. I expect reasonably good growth over the next year or two as a result of this”.

Plans of action

Paschal Naylor, chief executive at Arkphire, says it has worked with customers and suppliers planning for Brexit. “This has entailed setting up a logistics hub and UK business operations and conducting robust forecasting and business planning in order to minimise the impact. Alongside the impact of Covid-19, we have expanded our distribution centre and employee resources.”

Paul Line, commercial director at CWSI, claims the company is “very well-prepared” after completing a risk assessment with the support of Enterprise Ireland. He sees limited impact in areas such as currency fluctuation, staff working in the UK and data sovereignty (GDPR).

Then there’s the general business uncertainty. “after the most uncertain year most of us have ever experienced in business, Brexit just adds a further layer of uncertainty. This can cause businesses to delay investment decisions and IT projects which can lengthen our sales cycles”, Line remarks.

Michael Conway, director at Renaissance, says it is difficult to be prepared “for something that no one is clear about, neither in scope or actual rules”. Hardware devices are most likely to be affected and subject to disruption and delay.

“Things will settle down as inevitably a sensible balance of some sort will be achieved,” he adds, “but the likelihood of taxes and duty will mean sourcing technology within the EU will become more attractive than ever.”

Looking to January, he predicts it will “be disrupted and challenging with some sense and order coming into play following that. Things sadly will never be the same again and the reimplementation of trade barriers seems like a move to the dark old days, but inevitable.”

No alternatives

Nick Connors, managing director at Tekenable, says he would be “very surprised if a deal isn’t done. I think they will have to do something because the alternative for everyone is unimaginable”.

Much of the impact will be felt by customers in particular sectors, such as FMCG, and there doesn’t appear to be any Plan B for them.

He says there have been some effects, such as when it came to a tender which asked bidders to specify what would happen in the event of a no deal. “It was difficult to reply, because we’re not sure,” Connors says.

Darren Upson, VP for small business for Europe at Soldo, says: “What’s been constant throughout the whole Brexit process is uncertainty, which is why Soldo made the decision in advance to mitigate against this and establish Dublin as our European HQ in preparation.”

He believes this means “it will be business as usual for us and our customers come 1 January, whatever the outcome from negotiations”.


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