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The just-drinks Brexit survey - Analysis

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The impact of the UK's decision to leave the European Union (EU) will be felt in the global drinks industry for years to come, according to just-drinks' exclusive Brexit survey.

The drinks industry will feel the impact of Brexit for years to come

The drinks industry will feel the impact of Brexit for years to come

The result of the Brexit vote on 23 June has already had a notable impact on the industry's short-term confidence – particularly in the UK – but many respondents are pessimistic about the next five years at least.

Asked to quantify their level of confidence in the industry's prospects over the next three to 12 months on a scale of 1 to 10 (where 1 = no confidence and 10 = most confidence), UK respondents had an average confidence rating of 5.2.

This was the joint lowest figure (with apparel) across the drinks, food, automotive and apparel industries in the survey, conducted in a two-week period in July by just-drinks' parent company, Aroq.

Respondents from outside the UK were somewhat more optimistic – the rating was 5.8 for non-UK Europeans, and 6.2 for the Rest of the World.

Asked how the events of the past three months had impacted that confidence, the level of short-term pessimism was striking: of UK respondents, 64.9% said their confidence had been reduced, well ahead of, for instance, their counterparts in the UK food industry at 45.2%.

More than half (50.8%) of non-UK European respondents reported reduced confidence, while for the Rest of the World, the figure was a slightly less pessimistic 40.3%.

In all cases, pure optimism was hard to find: only 5% of UK respondents reported any increase in short-term confidence over the past three months, compared to 4.8% for non-UK Europeans, and 13% for the Rest of the World.

Moving on to long-term (the next 3-5 years) confidence levels, the survey showed a slight increase in optimism, with the UK rating at 5.5, non-UK Europeans at 5.8 and the Rest of the World 6.4. Again, the UK drinks figure was the lowest of the four industries surveyed.

It's clear that the industry believes that Brexit will have a real impact on medium- to long-term growth prospects, with 64.2% of respondents in the UK reporting reduced confidence over the past three months.

In Europe, 55.5% of respondents reported reduced long-term confidence – a higher proportion than that recorded for the short term – while 31.2% of those in the Rest of the World said their confidence had been reduced.

Again, precious few respondents voiced any optimism: 11.1% of UK respondents said their long-term confidence had grown in the last three months, compared to 9.5% in Europe and 11.7% in the Rest of the World.

Nor does the industry expect the full ramifications of Brexit to be fully understood for some time to come. While 36.4% of those in the Rest of the World expect this to happen within a year, that figure falls to 19.1% in Europe and 17.3% in the UK.

Indeed, more than 80% of respondents in the UK and Europe believe it will be at least two years before the implications of the vote are made clear. In the UK, nearly half (45%) think it will take at least five years, a sentiment mirrored by 36.5% of European respondents, and 31.2% of those in the Rest of the World.

For just-drinks' coverage of the UK's vote to leave the European Union, click here


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