Swedish companies in UK: ‘Brexit will be bad for business’

Swedish companies in UK: 'Brexit will be bad for business'
File photo: TT
A new survey shows that the bulk of Swedish companies operating in the UK do not believe a Brexit deal will be reached by the March, 2019 deadline and nearly half of them think Brexit will have a negative impact on future UK investments.

The survey, conducted by market research group Ipsos MORI in collaboration with the Swedish Chamber of Commerce and 12 other foreign chambers in the UK, revealed a fairly bleak picture of foreign companies’ outlook on the UK’s business climate in relation to the country’s planned divorce from the European Union.

Some 78 percent of the 112 Swedish companies that took part in the survey said  they are either “not very confident” or “not at all confident” that the UK will see a positive outcome by the March, 2019, deadline for its Brexit deal with the EU.

Around half also said that they believe Brexit will have a negative impact on investments in the country in the next five to ten years. A third of them, however, said they thought it would have no impact on future investments in the UK whatsoever.

An array of major Swedish companies, including flatpack furniture giant Ikea and fashion retailer H&M, operate in the UK. Contacted by The Local, H&M declined to comment on its outlook on Brexit and its UK operations.

Ikea, which opened up its first UK store 30 years ago in the the northwestern town of Warrington has already said that the Brexit vote has affected its UK business, with a weakening pound forcing it to bump up its prices.

“It is difficult at the moment. Currency is one of the biggest things that impacts a business like ours,” Ikea’s UK boss, Gillian Drakeford, told the Press Association last month. “We want to keep the product at a good price for the consumer, because we know that wallets are thinner, but we've had slight price increases in line with inflation,” he said.

In October, Ikea joined a growing number of international businesses appealing to the UK government for a post-Brexit “transition period”, calling also for a deal to protect businesses operating in the country from uncertainty in the event of a “no deal” scenario. 

An Ikea spokesperson told The Local on Friday that although it is too early to say how a Brexit will affect companies operating in the UK, “we will continue to watch the debates closely to analyse the potential impacts that leaving the EU could have on our business, supply chain, co-workers and customers.”

“This year marks our 30th anniversary in the UK and our ambitious growth plans remain, including building a strong brand, investing to improve the shopping experience for customers and to become more accessible to people across the country”.

In May last year, prior to the Brexit vote, Ipsos MORI conducted a survey in which Swedish companies operating in the UK said that the main issues they would like to see addressed in the Brexit negotiations include a solution on trade deals, access to the internal UK market as well as access to workers from abroad.

 “It’s not surprising that at the top of the agenda of the Brexit negotiations for Swedish business is smooth access to the EU market both for goods and services, but also good access to both high and low-skilled work force and regulatory alignment with EU,” Ulla Nilsson, the Managing Director of the Swedish Chamber of Commerce, said.

In February, the UK's Brexit minister David Davis met Sweden's EU affairs and trade minister Ann Linde in Stockholm, where he told Swedish and international media: “We want to have a very broad ranging free trade arrangement so Swedish companies selling to Britain, and British companies selling to Sweden will have the same sorts of freedoms they have today – they won't be identical of course.”

And British Prime Minister Theresa May penned an article for Swedish newspaper Dagens Nyheter in which she outlined the importance of “maximum freedom” in trade between the two countries.

But such reassurances have not done much to quell concern among Swedish businesses that trade with the UK will become harder and more expensive once the UK leaves the bloc. A reportcommissioned by Sweden's National Board of Trade and published in March predicted a worsening in EU-UK trade, “regardless of which alternative is the result of the exit process”.