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Coffee after Brexit

From the March 2019 issue.

Although there are still many questions, experts and coffee businesses alike say Brexit has big implications for the United Kingdom’s coffee industry.

Coffee after BrexitNot too different than two years ago, when the United States found itself divided following presidential nominee Donald Trump’s election, today the United Kingdom finds itself at a crossroads, with the nation divided over its membership in the European Union.

In June 2016, 51.9 per cent of UK voters – in a record turnout – voted in favour of leaving the European Union, a 25-year partnership. So following invocation of Article 50 in March 2017, the United Kingdom had two years to create a plan and come to an agreement with the European Union for its departure on 29 March, 2019.

On 15 January, Prime Minister Theresa May’s proposal was rejected by a margin of 230 votes – the biggest defeat of government policy since the 1920s. Despite this, she survived a “no confidence” vote that was tabled by an opposing party the following day.

Although terms of the departure and their ultimate effects on businesses are still unknown (nothing had been finalised as of print), the United Kingdom’s looming departure of the European Union has many implications for the local coffee industry.

For two years in a row, Allegra World Coffee Portal’s annual Project Café UK report found local coffee operators both frustrated and concerned about Brexit’s effect on the industry and their businesses. In fact, 49 per cent of industry leaders surveyed for the 2019 report indicated that Brexit was negatively affecting their business, and 87 per cent believe Brexit has damaged the UK economy.

“Sustained uncertainty on the UK’s future relationship with the EU continued to frustrate the coffee shop industry in 2018. The political impasse over the past 18 months has contributed to growing anxiety on labour shortages, rising prices, investment and eroded consumer confidence,” the 2019 Project Café UK report says.

Among those leaders surveyed, Allegra CEO Jeffrey Young says there are questions around whether their growth would have been stronger if it wasn’t for the uncertainty of Brexit.

“Both branded chains and independents have all had tremendous growth, but that rate of growth has slowed radically,” he tells Global Coffee Report. “Until only a couple years ago, it was well over 10 per cent growth, but it’s down to 4 to 5 per cent growth predicted for the next few years.”

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