It cannot have escaped your attention that Britain is on the verge of a referendum to decide whether the UK should remain a member of the EU, or exit (a so-called “Brexit”). We don't know what a post-Brexit world will look like but, aside from the inevitable effect on consumer confidence, we have briefly highlighted some of the issues likely to be of interest to UK retailers.
Imports and Exports
Much of the UK's trade is with the rest of the EU, with UK retailers importing and exporting products with little or no customs procedures and restrictions. If Britain leaves the EU, imports and exports may become subject to tariffs and new trade deals will need to be negotiated with both the EU and other countries, which will take a significant period of time and create a significant period of uncertainty for retailers.
Fewer Low Skilled Workers
It is likely that Brexit would end the free movement of labour from the EU into the UK and migrants would need a visa or work permit to work here. This may make it harder for retailers to recruit low skilled but crucial workers for supply chain or warehousing jobs, leading to increased staffing costs when many retailers are already struggling with their existing cost base.
The leave camp believes such costs will be countered by a liberalisation of the UK’s employment laws, such as a possible abandonment of the TUPE and Working Time Directive legislation. While this is possible, the UK has a long track record of creating its own employment protections and even going beyond the necessary ambit of existing EU legislation.
Red Tape and Product Regulation
Although both sides may argue on this point, we do not believe there will be any great change in red tape or product regulation should Brexit occur. The UK is unlikely to drop its current harmonisation with EU standards, as this would close that market and is a condition of access to the single market.
However, it is possible that the UK could accept U.S. product regulation and safety standards so that a U.S. company could sell directly into the UK, without any alteration to the product or packaging. Although the product would not be able to cross into the EU from the UK, this would open up the UK as an easier market for U.S. goods which could be imported freely.
To read the full version of this article, please follow this link to our EU and Competition Law Blog.