Industries build pro-EU consensus before vote

Consensus in the horticulture and retail industries is building towards staying in the EU ahead of the referendum on 23 June, but a weakening of the pound is raising questions on how the UK industries will cope.

Clive Daley, director at retail consultancy mdj2, said retailers' main Brexit concern is around currency exchange rates, where a predicted drop in the strength of the pound, specifically against the dollar, is likely to be felt the quickest.

He pointed out that experts predict Brexit could wipe a further 20 per cent off sterling's value and, as a result, purchasing products from the Far East would become "rapidly more expensive".

"China factories are unlikely to help with lower costs as they have their own challenges with increasing labour costs and some raw materials," said Daley. "A drop in the dollar exchange rate is also likely to see an increase in supply chain costs for retailers and suppliers as the cost of oil would rise, in turn pushing up diesel and petrol prices.

"For many garden centres and nurseries there is a greater exposure to the euro exchange rate, which is also predicted to drop in the event of Brexit, especially through their relationships with Dutch nurseries.

"A Brexit vote could also have implications, although perhaps not in the short term, for many garden centres and suppliers relating to their workforce as many businesses, especially production nurseries and fruit farms, employ large numbers of people from across the EU."

He added: "As the various polls suggest, the vote could still go either way. But garden centres and suppliers need to spend time over the next month getting a good understanding of the potential implications of Brexit and building a plan so that they can respond and adapt quickly to any short-term implications."

Meanwhile, when asked "should the UK remain a member of the EU or leave the EU?" British Independent Retailers Association members said:

- Remain a member of the EU: 38.62%

- Leave the EU: 32.93%

- Don't know: 28.46%

The HTA has declared a neutral position after 169 members responded to a poll and gave no overall majority to stay or leave.

HW polls of growers at a Midland regional grower event and Garden Industry Manufacturers Association members saw around two-thirds saying they want to stay in the EU.

Alton Garden Centre director Andy Bunker said: "For me and the business is if ain't broke it don't need fixing. I can see the knock-on effect of what might happen in European plant trade - if you come out, a bit of turmoil for a year or so then it will align itself. I don't want it to happen. We mustn't lose sight that the UK is an important market to the whole world."

Plants for Europe owner Graham Spencer said Brexit could mean more expensive plants. His calculations show new UK post-EU Plant Variety Rights (PVRs) would cost £2,221 and an EU PVR £1,590. He said this extra expense could cost jobs, "stifle innovation in new plants" and mean increased royalties - and ultimately more expensive plants.

Spencer concluded: "For plant breeders and innovators, we think that the argument is simple. Brexit can only make business more difficult and more expensive. It is clear to me that Brexit can only have negative consequences for plant breeders, growers, retailers and gardeners. It will likely lead to reduced choice, increased prices and possible job losses."

  • Horticulture Week is surveying ornamentals and edibles production growers on how they feel leaving the EU might impact their businesses. Take part in the Horticulture Week Brexit survey.

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