Skip to main content Skip to Footer

LATEST THINKING


Brexit: A Guide for Your Business

BACKGROUND TO BREXIT

On the 23rd of June 2016, the United Kingdom voted to leave the European Union. Accordingly, Article 50 of the Lisbon Treaty was invoked on March 29th, 2017 and negotiations on the terms of the UK exit have begun. The UK has said it plans to leave the EU’s Single Market and the EU’s Customs Union, take back control of immigration policy, and end the jurisdiction of the European Court of Justice. The formal exit is scheduled to take place by the end of March 2019, although a subsequent transition period is planned, with arrangements staying much the same for a further 21 months.

The tight timeline for the conclusion of the process—along with the obvious politics and significant complexity—are major factors in the negotiations; and the potential outcomes are influenced in large part by both sides’ "red lines." Progress has been made but work remains to be done to ensure a mutually acceptable deal is in place by the March 2019 deadline.

Close ties and political uncertainty means Ireland and Irish business is uniquely exposed to the consequences of Brexit. Businesses need to be proactive in the way they address this unique set of circumstances.

DOWNLOAD THE FULL REPORT [PDF]

BREXIT EXPOSURE

The UK remains Ireland’s second largest export market after the United States, and the primary market for many Irish businesses due to its size, ease of access, shared languages, similarities in culture and consumer tastes, and comparable legal framework. Two-way trade between Ireland and the UK is approximately €60 billion per year and is estimated to support 400,000 Irish jobs.

The Common Travel Area facilitates this strong relationship by allowing for free movement of people and goods between Ireland and the UK, and enables businesses to establish operations on an all island basis—in effect creating a shared labour market. The commitment by the EU and UK to not reintroduce a hard border on the island of Ireland is a positive step in supporting these closely integrated business operations and maintaining the peace and stability delivered by the Good Friday Agreement.

The tight integration of Ireland and the UK is particularly evident in the energy markets, with UK gas and electricity connectors providing a significant portion of Irelands energy needs and, critically, the UK plays a crucial role in connecting Ireland to EU markets and beyond.

Due to Ireland and the UK’s common law jurisdictions, Irish law is similar to UK law and this facilitates Irish business operating in the UK and vice versa. Along with these related legal frameworks, the UK has been a strong ally with regards to negotiations and policy creation, with Ireland benefitting from access to UK policy research and its administrative scale and experience.

The tight integration of Ireland and the UK is particularly evident in the energy markets, with UK gas and electricity connectors providing a significant portion of Irelands energy needs and, critically, the UK plays a crucial role in connecting Ireland to EU markets and beyond.

Due to Ireland and the UK’s common law jurisdictions, Irish law is similar to UK law and this facilitates Irish business operating in the UK and vice versa. Along with these related legal frameworks, the UK has been a strong ally with regards to negotiations and policy creation, with Ireland benefitting from access to UK policy research and its administrative scale and experience.

BREXIT AND YOUR BUSINESS:
POTENTIAL IMPACTS

With a hard Brexit looking like a distinct possibility, Irish business needs to reassess its tightly intertwined UK relationships and look beyond that market for growth. We have identified 10 broad areas where Brexit may have implications for Irish business.

CURRENCY

The fall in sterling’s value has been one of the immediate impacts of Brexit for Irish business. Uncertainty caused by Brexit means that Irish business should prepare for a potentially extended period of currency volatility.

TECHNOLOGY

Brexit may introduce additional complexity to Irish-UK operations, and it may have knock-on implications for business technology systems.

SUPPLY CHAIN

Supply chains between the UK and Ireland currently function on the principles of the Customs Union and Single Market. A new regulatory and customs border could present significant logistical barriers, delay trade and add to business costs.

CONTRACTS

While there should not be any immediate impacts on commercial contracts, there are likely to be a number of longer-term contract risks for Irish businesses. Companies will have to consider the effect Brexit might have on contractual rights and obligations.

FINANCE & FUNDING

Post-Brexit uncertainty, along with global volatility, may have implications for FDI decisions, access to capital markets and access to EU funding programmes.

WORKFORCE

Post-Brexit UK labour market restrictions may impact the ability of Irish businesses to allocate resources and place an additional administrative burden on businesses.

REGULATION

Brexit presents a wide range of potential regulatory challenges. In the short-term the UK economy may no longer be covered by existing EU regulatory frameworks. In the long term, UK rules may diverge from EU norms.

TAX

Changes to tax rules and systems may affect how companies active in the UK, structure and locate operations to maximise tax efficiency.

MARKET

Brexit may impact customer behaviour and market demand. The introduction of trade barriers in the UK, new non-EU competition, or a further slowdown in UK economic growth, for example, may make the UK a trickier export market.

OPERATING STRUCTURES

Companies with a high proportion of UK-to-EU, or EU-to-UK trade may want to review their operating structure options and geographic footprint to minimise cost to serve, tax and risk.

SECTORAL PERSPECTIVES ON BREXIT

Brexit is having, and will have, very different impacts on business in different sectors. We’ve focused on 10 sectors and identified the short- and long-term challenges each face. By examining their current relationship with the UK and key trends we’ve identified the key impacts to consider in each area of the business.

RETAIL


The sector operates on tight margins with complex supply chains. Retailers are particularly exposed to potential new customs or regulatory barriers.

MANUFACTURING


A weak sterling has already increased competitive pressure for Irish manufacturers exporting to the UK, particularly affecting manufacturing SMEs who heavily rely on short-term funding. Trade barriers would add to these difficulties.

FOOD AND DRINK


UK and Irish food and drink industry supply chains are intrinsically linked. The fall in the value of sterling has already intensified the competitive pressure in UK markets. Any economic hit for the sector would have a disproportionate knock-on impact on the wider Irish economy.

FINANCIAL SERVICES


Ireland’s domestic banking sector has close links to the UK. International financial service-businesses based in the UK may consider relocating to Ireland to maintain Single Market access and passporting rights.

TECHNOLOGY, RETAIL TELECOMS & AV

Ireland is the second-largest exporter of computer and IT services in the world. Post Brexit, Ireland could provide continued access to the Digital Single Market for businesses wishing to relocate within the EU, but access to UK markets could face disruption.

EDUCATION


The UK and Ireland are part of a connected Anglophone higher education network. These links are between institutions, academics, and students. The UK Government wants to continue to collaborate with European partners, but Brexit presents challenges.

ENERGY


Ireland relies on the UK for energy supplies and currently has guaranteed access to emergency energy supplies under EU law. Any new trade barriers could increase costs for energy providers and consumers.

TRANSPORT AND TOURISM

Ireland and Northern Ireland have a highly integrated transport network with extensive cross-border road and public transport connections. Shared EU membership has allowed businesses to operate on an all-island basis.

BIOPHARMA


UK and Irish biopharma supply chains, manufacturing capabilities and distribution methods are highly linked and vulnerable to Brexit disruption. Ireland could benefit from companies wanting to invest within the Single Market.

PROPERTY


Many Irish construction firms have an exposure to the UK market. An economic slowdown post-Brexit would result in a slowdown in the property sector. The UK’s loss of Single Market access may make Ireland a more attractive location for FDI and drive property demand.

BREXIT TOOLKIT: AREAS FOR CONSIDERATION

The businesses that will thrive in this uncertain environment are those who act now to understand the challenges and opportunities, and take advantage of:

- Competitors failing to adapt quickly to changes in their operating environment

- Changes in consumer buying behaviours to create a more competitive business model

- Volatility in asset prices to acquire at the right time

We have identified “no regret” actions to guide businesses through this period of uncertainty.


DOWNLOAD THE FULL REPORT [PDF]

CONNECT WITH US 

ADAM KELLY

Managing Director,
Accenture Ireland,
Brexit Lead

Mail to Adam Kelly. This opens a new window.

VICTOR KOSS

Managing Director,
Accenture Ireland,
Strategy Lead

Mail to Victor Koss. This opens a new window.

ARNOLD DILLON

Head of Strategic
Campaigns, Ibec

Mail to Arnold Dillon. This opens a new window.