What could a Brexit mean for the Hospitality Industry?


Brexit seems to be the word on everyone’s lips as we await the verdict of the 23 June referendum. Being in the business of food and hospitality public relations, we read plenty of articles about Brexit in trade magazines that talk about the advantages and disadvantages of a Brexit and what it could mean for the hospitality industry.

Looking at various articles, survey findings and research results – two pieces of literature in particular stood out as being informative and beneficial for the industry. These were a professional comment piece by Matthew Pryke, partner at Hamlins Law Firm on Caterlicensee.com and a study conducted by William Reed / HIM (as found in the Publican Morning Advertiser).

From the literature, we took it upon ourselves to compile a list of statistics and statements in order to clarify what a Brexit could mean for the industry, see below:

Here we are:

  • A study conducted by William Reed / HIM (in the Public Morning Advertiser) revealed that small foodservice operators in the industry were keen to leave the EU with 46% of people surveyed voting 39% to leave 37% to remain.
  • 28% of people surveyed admitted that between 1 and 30% of trade their company did was with the EU and 38% said they imported goods and services from the EU.
  • After a Brexit the UK can still operate under the European Economic area by forging a new trade relationship with the EU – this relationship would mean that the UK could operate under the umbrella of EU employment law.
  • If a Brexit wipes 20% off the pound, many brits may opt for a ‘staycation’, taking domestic holidays and putting money straight back into the UK economy rather than spending money abroad.
  • The vast majority of businesses in the hospitality industry employ continental European staff, businesses would need to change the terms in their employees contracts to reflect the changes in law in different jurisdictions.
  • For those working overseas in the UK hospitality sector, the Brexit could have a negative impact. With a shortage of skilled personnel in certain positions such as restaurant chefs, luring in skilled industry workers from the EU may be more difficult.
  • In the William Reed study conducted among suppliers and retailers in the industry that asked for thoughts on how a Brexit would affect business – out of half of the people questioned, 26% believed that their company would face a ‘moderate or serious recruitment issue’.
  • When asked their opinion on the impact of food prices, 41% of people stated that they thought it would increase.
  • New, additional work permits would be required – resulting in costlier, more complicated, time consuming processes, this in turn could incentivise EU workers opting for work in EU member states.
  • Clauses relating to restriction-free trade across a single market would need to be amended and commercial contracts with suppliers would also need a review after a Brexit as the UK would be operating under different principles of EU contract law.
  • For each company the UK trades with, the UK would have to have in place a different trading agreement that it imports / exports goods from whilst seeking to avoid excessive tariffs or restrictions.
  • With present uncertainty of whether the UK will stay or go, consumer confidence could be affected inevitably affecting trade.

It’s important that businesses in the hospitality sector stay well-informed and prepared in the run up to the referendum, as is the opinion of Matthew Pryke, Hamlin Law Firm – if a Brexit does go ahead it will not be an overnight change, there will be more of a ‘layover period’ for businesses.

Leapfrog will be keeping a close eye on the media in the lead up to the referendum, check out our social media for the latest news in the food and hospitality industries.