1. News
March 28, 2018

Sainsbury’s would need a year to act on post-Brexit trade deal

The UK’s second biggest supermarket Sainsbury’s has said it would need at least a year’s notice to figure out how it would deal with new European Union-UK trading arrangements once the Brexit transition ends.

By Pamela Kokoszka

The UK’s second biggest supermarket Sainsbury’s has said it would need at least a year’s notice to figure out how it would deal with new European Union-UK trading arrangements once the Brexit transition ends.

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EU leaders approved a transition period to help businesses adapt after Brexit last week. The talks on bloc’s future trading relationship with the UK will start next month.

They have also confirmed a political commitment to let the UK effectively stay in the bloc until the end of 2020, or 21 months after formal Brexit on 29 March 2019.

Sainsbury’s chief executive Mike Coupe said: “Effectively the can’s been kicked down the road by 21 months.

He added: “We would need somewhere around 12-15 months’ worth of notice to be able to adapt to whatever we need to adapt to—to deal with any arrangement that is more complex than the current free movement of goods through the Customs Union.”

Sainsbury’s currently sells about 30% of goods sourced from the EU, which varies depending on the time of year.

Coupe is reportedly confident that negotiations between the UK and the EU would deliver a trade deal.

He said: “But anything that’s not a Customs Union and anything that doesn’t allow free movement of goods between the EU, as it will be, and the UK will add cost or reduce the freshness of the products we sell or both.”

“If there was a ‘hard Brexit’, as in somehow the drawbridge was pulled up, it wouldn’t take long before there were literally thousands of lorries parked on either side of the (English) Channel,”

According to Coupe, it only takes three to four days for the UK’s food supply to be seriously disrupted.

The economic uncertainty due to Brexit has led to British people spending less. However, data released last week showed UK inflation is rising at a lower rate than expected and wages starting to grow.

Coupe said: “If wages start rising faster than cost inflation, disposable income goes up, then you’d expect that to manifest itself in more consumer spending in retail.”

“But I think it’s very early days, I certainly wouldn’t be brave enough to call the turn at this point – we’ve just seen the (wages growth and inflation) lines go back to being equal.”

In the past Coupe warned that the UK must retain ‘frictionless’ borders with Europe or face crisis ‘the likes of which we haven’t seen’.

He also warned that a no-deal Brexit would affect the freshness of the products and increase the costs.

Coupe however remains optimistic, saying: “It’s inconceivable to me that there won’t be a solution found.”

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2022: So far In Venture Capital

Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
  • Track the Aggregate Investment Volumes in PE/VC-Stage firms across geographies and sectors, in addition to viewing the specific deals that drove these volumes
  • Identify the top investors already active in any sector-Geography combinations
  • Assess the Performance of Financial and Legal Advisors, supporting the Dealmaking in any segment of choice (Customizable League tables)
  • Understand what is driving the PE/VC fundraising (Deal Rationale)
  Consult our full report here and optimize your business strategy.
by GlobalData
Enter your details here to receive your free Report.