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The Pure Confectionery Company is planning to export to the UK market but is concerned about the effects of Brexit - Junior Cycle Business Studies - Question 18(c) - 2019
Question 18(c)
The Pure Confectionery Company is planning to export to the UK market but is concerned about the effects of Brexit. Outline two difficulties the company might face ... show full transcript
Worked Solution & Example Answer:The Pure Confectionery Company is planning to export to the UK market but is concerned about the effects of Brexit - Junior Cycle Business Studies - Question 18(c) - 2019
Step 1
1. Increase in taxes on exports.
Answer
One major difficulty the Pure Confectionery Company may face is the increase in taxes on exports due to new tariffs imposed after Brexit. For instance, if an excise duty is added to the price of their products, this can lead to significantly higher retail prices for consumers in the UK. Consequently, these increased costs may deter UK consumers from purchasing their products, prompting them to opt for similar products that are manufactured locally or within the EU, which are not subjected to these additional tariffs.
Step 2
2. Introduction of quotas on imports.
Answer
Another challenge could be the potential introduction of quotas by the UK government on the amount of imported goods similar to those produced by the Pure Confectionery Company. Such quotas would prioritize the sale of homegrown products, limiting the availability of imported goods in the UK market. This could severely restrict the company's ability to compete in the market, reducing their sales and impacting their overall business strategy.