On 23 June 2016, the UK will hold a referendum to decide whether it will remain in the European Union (EU).
Many beekeepers have asked what a possible UK exit from the EU (the “Brexit” scenario) might mean for Vita. As a biotech enterprise headquartered in the UK and trading internationally with a substantial market in the EU and subject to various international pharmaceutical regulatory systems, Vita has of course been looking into the potential impact.
One thing is certain: there are no quick, definitive or simple answers. The scenario of a country leaving the EU is unprecedented and therefore far from predictable.
Even the duration of the process of leaving the EU is uncertain: an exit process is widely expected to last for between five and ten years even though in European treaty terms exit negotiations are required to be complete within two years.
If Brexit happens, Vita’s business is expected to be impacted in many different areas.
Trade tariffs might change, possibly for the worse in EU trades and possibly for the better for other global trade. However, it is certain that more Vita resources will be required in administering increased documentation requirements.
Vita’s technical personnel must be experts. Operating in such a niche sector, Vita already faces skill scarcities when appointing new staff, so Vita’s pool of potential recruits might be further reduced if, as is likely, movement of people across EU borders is curtailed.
Vita’s current access to EU research and development funds would cease under a Brexit scenario. UK funds would be available, but co-operation with other EU counties would become much more difficult and some research could not happen unless Vita were too relocate to an EU country.
Currently, Vita’s regulatory and quality assurance issues for EU countries are determined by EU procedures for member countries. A UK exit from the EU would leave Vita with two main options of contracting out such issues to an organisation in an EU country or relocating its head office and the relevant personnel.
Finally, the effect of Brexit on currency exchange rates is notoriously difficult to forecast, but many commentators talk of a UK Sterling dropping in value by 15-20% in the short to medium term. Such a drop would be likely to benefit Vita’s exports to most countries.
In short, it is clear that a Brexit scenario would impose strains on Vita’s finances and on its administration to accommodate the necessary changes. Already the company is having to devote resources to develop contingency plans.