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New research finds one in three North businesses concerned about Brexit supply chain impact


Oct 12, 2019 #Brexit

One in three regional firms are concerned about the potential impact of Brexit on their suppliers and customers, according to new research from insolvency and restructuring trade body R3.

And with the Government’s 31 October Brexit deadline looming, more than one in five (22%) of the businesses surveyed by R3 across the North East, North West, Yorkshire and Humberside said they had yet to review its potential impact on their supplier and customer network.

The research, which was carried out for R3 by BVA BDRC, found that 14% of the businesses surveyed across the north of England have reviewed the potential impact of Brexit on their suppliers and customers and were ‘very concerned’ by what they had found, with another 19% being ‘somewhat’ concerned.

Andrew Haslam, North East chair of R3 and head of specialist business advisory firm FRP Advisory LLP’s Newcastle office, says: “It’s a serious worry that a third of regional firms feel they are exposed to a supply chain risk as a result of Brexit, while on the other hand, businesses which don’t understand how Brexit will affect their supply chains are putting themselves at risk of sleepwalking into trouble.

“A key part of preparing for Brexit is looking at how it affects your supply chain and customers. It’s all very well making sure your own business has put adaptation plans in place, but these plans might not help if the businesses you depend on – customers and suppliers – are unprepared.

“If your customers and suppliers aren’t prepared, you need to plan for how to deal with that. Businesses need to think about the alternative suppliers they can use, or how they can diversify their customer base. Businesses should also consider if they can work together with suppliers and customers to find shared solutions to what will ultimately be shared problems.”

More positively, 32% of businesses across the North East, North West, Yorkshire and Humberside said they had reviewed the impact of Brexit on their suppliers and are either ‘somewhat reassured’ (17%) or ‘very reassured’ (15%).

Andrew Haslam continues: “It’s encouraging that a solid proportion of businesses have checked how their suppliers and customers are preparing for Brexit, and that they are reassured by what they’ve found, but even so, it’s still a minority of businesses which are in this position.

“R3 research last year also found that one in four UK companies had taken a financial hit following the insolvency of a supplier, customer or debtor in the previous six months, which clearly illustrates the reach and impact of the ‘domino effect’ of one struggling business often affecting the fortunes of others.

“It’s all too common for an otherwise successful business’s financial health to be undermined by customers or suppliers running into trouble, and really important that businesses move to seek qualified, impartial expert advice if they are unsure about how Brexit will affect them or their supply chain.”