PPA Brexit survey: Results
Earlier this year, PPA conducted a survey on Brexit with members, following on from a similar survey conducted in 2016. Below, you can read the results of this new survey and also find out what actions leading distribution companies are taking in preparation for March 29
Ellie Austin scored a job at Immediate Media as a Features Writer for Radio Times after graduating from the Magazine Journalism MA course at City University. Here she talks about working in the fast-paced world of a major weekly magazine and the power of a good coffee.
With just 16 days to go until the UK is scheduled to leave the European Union, on March 29, parliament yesterday voted to reject the Prime Minister’s Draft Withdrawal Agreement, for the second time. Today, a vote will take place on whether to exit on March 29 with no deal. If that fails, as expected, then tomorrow a vote will take place on extending Article 50 and delaying Brexit beyond March 29.
Meanwhile, in preparing for no deal, the government has published a 1,477 page document detailing the temporary tariff regime that would apply to EU imports into the UK, with welcome news confirming a zero-tariff on print publications, newsprint, paper and related supplies.
With uncertainty the buzz word in Westminster, PPA’s latest Brexit survey sheds light on views across our industry.
The headline result shows no movement in publishers overall view of Brexit, with 56% preferring the UK retain full Single Market membership, down just 1% from 2016; and 71% preferring No Brexit to Theresa May’s Deal (7%), or No Deal Brexit (7%).
As the UK government and EU ramp up no deal planning, just 23% of survey respondents have made investment in Brexit planning (deal or no-deal), with 58% awaiting political decisions before deciding how, or whether, to act.
29% have made contingency plans for a no-deal scenario, including activities such as setting up EU subsidiaries, increasing paper stocks, holding higher cash reserves, and relocating print/production to the UK.
In all, 56% of publishers report client decisions being impacted in some way by Brexit.
On the impact of no-deal, with responses ranging from “not at all concerned (0)” to “extremely concerned (100)” publishers on average score a no-deal Brexit 66. While larger publishers, employing 250+ staff, were far more pessimistic, scoring on average 89.
On preparedness for Brexit - whether on March 29 or the scheduled end of the transition period on December 31 2020 - this differential disappears, with publishers across the board scoring in the exact midpoint between “fully prepared” and “not at all prepared”.
Just 4% of publishers planned to increase investment in the EU as a result of Brexit in our 2016 Survey, this has risen marginally to 11% today.
Currently, printed magazines, digital media services, and related paper products are not subject to tariff charges under EU External Tariff or World Trade Organisation rules. However, 45% of publishers surveyed said that tariffs on physical goods and services would negatively impact their business, up 4% from 2016, while the proportion who say this would have no impact has dropped from 42% to 20%.
There has been no significant movement in answer to “what impact has the UK's decision to leave the EU had on your recruitment plans for this year?” with 75% saying it has had no impact (2019) down from 86% in (2016). A marginal increase in the number of businesses planning to reduce headcount, up from 2% (2016) to 10% (2019).
With more than half of publishers employing EU nationals, there is concern about the ability to retain and attract talent, with a rise from 14% to 29% in those “very concerned” about retaining existing EU nationals, and a similar 16% increase in those “very concerned” about recruiting new EU nationals. In total, those somewhat/very concerned has risen from 35% to 57% and 54% to 72% respectively over the retention and recruitment of EU nationals.
13% report that staff have left, or rejected appointment/promotion, as a direct result of the UK's decision to leave the EU.
In all, the picture remains pretty stable, with no significant movement in publishers views on the key issues as the UK edges closer towards EU departure. As the political process rumbles on, the PPA continues to represent publishers interests to government and navigate the twists and turns of the debate in Westminster and ultimately the threats or opportunities that lay ahead as a result.
View from the Supply Chain
Further to our survey results, we spoke to industry leaders in the key links of the supply chain to assess how a no-deal Brexit would be handled.
On the potential implications of a no-deal Brexit and subsequent contingency planning, Frank Straetmans, Managing Director of Frontline Distribution commented, “Our core activities are UK distribution, our main export markets are the US and AUS so nothing to report there.”
He added, “Some of our publishers print some of their titles on the continent and we have some contingency plans in place here. None of this product is especially time sensitive so we have some time in the supply chain/transport.”
Mr Straetmans concludes, “My real concern is the impact on consumer confidence of ongoing uncertainty relating to the Brexit process. We know that there is a strong correlation between consumer confidence and magazine sales.”
Mark Churchill, Group Supply Chain Director at Frontline commented on the actual process of contingency planning for the company, commenting:
“The Frontline Group have reviewed the potential impact of Brexit across the Supply Chain, with particular focus on the impact of a ‘no-deal Brexit’. The aim is to ensure that magazines continue to be supplied to retail stores under any outcome. It is worth noting at this point that, due to the unique way magazines are created, we don’t have the same option as other suppliers to ‘stock pile’ product to cover any delays in the movement of products.”
He went on to outline the companies contingency plans, some of which will be implemented as a preventative measure, while others will only be used if they are required:
- The option to switch production back to the UK for a short period to remove the risk of delays at UK entry points
- The option to bring forward production schedules for titles printed outside of the UK (This allows more time for titles to be transported to the UK and should minimise the impact of delays at the port entry points).
- The option to re-route vehicles, with all product coming in to the UK via alternative entry points. This is something that we have managed in the past to avoid delays e.g. using ferries from Rotterdam or Dunkirk rather than the Channel Tunnel when there were delays due to migrant issues at the Calais border.
- Publishers have reviewed the purchasing arrangements for raw materials and have relevant measures in place to ensure that production can continue as planned, this includes the provision of paper and, where relevant, covermounts.
He added, “We have been in regular contact with the logistics providers we use for transportation to mainland Europe and Ireland and we understand the potential requirement for import/export customs declarations and the relevant documentation under a no-deal scenario. In Ireland, we deliver in to Dublin and Belfast independently of each other, so don’t need to take any ‘cross border’ movements in to account in our plans.”