In an effort to avoid post-Brexit tariffs, a third of British businesses are looking for UK firms to replace EU suppliers. Meanwhile, nearly half of EU businesses working with UK suppliers are in the process of finding local replacements.
The figures are revealed in a new survey by the Chartered Institute of Procurement and Supply (CIPS), which found that 32% of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK.
For those trading with other Member States, UK-based suppliers are set to lose out as 45% of businesses currently using them seek non-UK replacements.
The survey of more than 2100 supply chain managers also found that 36% of UK businesses are intending to respond to Brexit by beating down supplier prices and that 11% of firms think that part of their operations may no longer be viable.
Although both UK and European supply chain managers agree that the main priority for the Brexit negotiations should be to keep tariffs and quotas to a minimum, those in the UK with responsibilities for brokering international deals believe there are serious obstacles to achieving that objective.
More than a third (39%) said they thought that the UK is in a weak position to negotiate and 36% cited lack of time as a major factor in achieving a good deal.
Even more worryingly, 33% of respondents believe that the UK has a dearth of supply chain expertise and knowledge to draw on.
Commenting for the CIPS, Gerry Walsh noted that both European and British businesses will be ready to reroute their supply chains in 2019 if trade negotiations fail – they are not wasting time to see what happens.
“The separation of the UK from Europe is already well underway even before formal negotiations have begun,” he added.
