Is UK Inc. just fishing? Let’s hope not, for Brexit’s sake

Boat stuck in the sandWe are barely two weeks into Brexit, and the UK fishing industry seems in serious trouble. Let’s hope the rest of the UK isn’t right behind.

Fishermen have overwhelmingly voted to leave, as the Common Fishery Policies gave access to UK waters to European fishing boats for a majority of the catch. The treaty, signed during Christmas, plans a much larger share of the UK catch for UK fishermen, and free access to Europe. So all good, right? Quite the opposite.

  • British fishermen can catch more fish, yes, but unfortunately export formalities at the border are so difficult, that the fish are rotting in the trucks before they can reach the continent.
  • As a result, fish processors and transporters have told boat owners that they can’t buy their fish anymore. Fish prices in UK are 40-80% downBoats are mostly staying in the harbors. Some of those who go out are sailing to Denmark harbors to sell their catch, a 72h journey.
  • So fishermen have their fish, but they can’t eat it, aka sell it to Europe anymore. It looks like the unrestricted flow of goods and a large European market had some value after all…
  • Worse, European buyers are now looking for different providers, after realizing the problem is there to stay. This spells doom for UK exporters.
  • Fishermen, fish processors and fish exporters feel betrayed by Westminster, and will drop their rotten fish in London.
  • London talks of ‘teething’ problems, which enrages the fishermen further, as the problem seems structural and therefore unsolvable. Let’s not even mention that the fisheries minister did not read the Brexit deal, since she was too busy with Christmas.
  • To make it even harder, 70% of the UK’s fishermen are in Scotland and Scotland voted for remain. No doubt this situation will feed the call for a new independence referendum.

Meanwhile,

So far the government’s answer has been a request patience as the country adapts to the new world of regulations and red tape. Westminster also promises compensation for the fishermen. Which begs the question if only the fishing industry (0.2% of the GDP) will be impacted and need financial help from the government. Unfortunately, many exporters find the same friction, and the government has limited resources, and 2020 brought UK its deepest recession in three centuries

Credits to Dani Garavelli at The Scotsman.

 

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Written by Gontran de Quillacq

Gontran de Quillacq is an expert witness and a legal consultant. He is a recognized authority in options, trading, derivatives, structured products, portfolio management, hedge funds, mathematical finance, quantitative investment, strategy research and financial markets in general.

1 Comment

  1. Gary

    Beware of getting what you want… Many who voted for Brexit are finding out that when you get it, you may not want it!

    Reply

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