What will the FMCG landscape look like post Brexit?

Published: 12-Feb-2021

Brexit, along with the disruption in the consumer space caused by the pandemic, represents one of the biggest changes in recent history. So, bearing in mind how uncertain 2020 turned out to be, what can we expect in 2021?

Brexit! It may have been the most contentious event for decades in the political world, but we now have a deal. I think I can safely speak for all of us when I say that we will be glad to see an end to the whole uncertainty and not just because of the discord it caused.

After a year like 2020, I think we could all do with the business landscape settling down. For the fast-moving consumer goods (FMCG) market, of course, this deal is particularly important because it is highly sensitive to changes in the supply and distribution change.

Brexit, along with the disruption in the consumer space caused by the pandemic, represents one of the biggest changes in recent history. So, bearing in mind how uncertain 2020 turned out to be, what can we expect in 2021?

Return to normality

I think we need to start by being hopeful of a return to some normality in the consumer space. During lockdown, of course, the amount of traffic through previously reliable sales areas reduced considerably.

That should pass as normality returns, but at present, there is a second issue because the cost of shipping is high, to say the least, and there is bound to be a knock-on effect as this filters through to pricing on the shelf and the general cost of supply.

Some of this will ease as supply from the far east returns to normal, but as far as the EU goes, the tariff and new administration costs are probably here to stay.

This could result in less money in the pot for salary rises and an increased cost of sale for the products themselves. That said, this is a pretty robust industry, and it tends to roll well with the punches, so to speak.

The question over staffing

Many industries have become used to the availability of EU nationals in the UK. European workers make up a significant part of the workforce, but with Brexit, the rules on who and who cannot work in the UK are changing dramatically.

As of 2021, there is no difference between employing EU nationals and workers from the rest of the world as far as the government is concerned. That means there are some key areas that every employer needs to consider if they do rely on significant levels of EU nationals in their teams.

  • Have you got stability after June 2021?
    The current settlement scheme comes to an end in June. Any EU nationals currently permanently (or indeed temporarily) employed should really apply ASAP if they want to remain in the UK when the scheme ends. It’s a relatively simple process, but time is quickly running out to complete it. Gauging the impact this will have on your workforce now could save significant problems later.

  • Have you got a recruitment partner to help with the new system?
    As with any change to recruitment process or law, it’s best to have a recruitment specialist to help you through the red tape. For example, visas require a sponsorship process, and the workers must meet minimum wage and English language conditions to be issued one. There are some exceptions to this, but an end to free movement means that the new one size fits all package must be adhered to.

  • The right to work evidence will change
    As the system for visas comes in, so will new evidence requirements to prove the employees have the right to work. The good news is that at the moment at least, there is no need to retrospectively check current EU nationals against the new system.

As far as the domestic employment market goes, it would seem likely that the end of free movement, the requirement for education levels and skills needed for the visa system, and the more complex right to work requirements, will impact the availability of low skilled labour.

Sadly, for those affected, the influence of covid will mean redundancies and closures. However, this should release more potential workers into the job market, which may offset some of these vacancies and offer the hope of employment to some of those impacted by the pandemic.

There is a possibility that experienced workers may be able to demand a premium from employers in some areas as the market changes. One solution to this could be to upskill some existing workers to take supervisory and more varied roles and reinforce the workforce with less skilled team members.

Job offers with the potential for progression, training and development may well get a better response from active and passive candidates as the year progresses.

The bottom line is that the new visa-based system, a rapidly changing market, a new balance in the availability of workforce teams and the continued fall out as the Brexit deal settles in, mean 2021 could see significant changes to the employment market.

Call us, and we will be happy to discuss how you can best navigate the changing FMCG landscape this year. As always, we are here to help you get the people you need.

Relevant companies

You may also like