The single market was meant to promote good long term investment both ways across the Channel. The weakest type of business arrangement is an agreement to buy their exports. You can always switch to some other company and country to buy your next consignment. The strongest is founding businesses in other EU countries and growing them in situ.It is much more complex closing them down or selling up.
The French and Germans have been keen to exploit opportunities to invest in the UK and establish businesses. Just look at the way Aldi and Lidl have brought their business model to UK shoppers, and grown a large market share. Look at the way the French have exploited easy access for mergers to buy up large amounts of the UK utilities sectors. The UK does not have similar freedoms on the continent where nationalisation, government controls and directions impede similar investment.
In contrast, the UK’s largest food retailer, Tesco, has no shop at all in France or Germany (or for that matter in Italy or Spain). In general retailing, an area of UK strength, M and S set up a continental business only to close most of it down in 2001 claiming it was not profitable and had no future. M and S today has just a few shops in the Paris area, with nothing in Germany, the continent’s largest and richest market. Boots too has no stores in France or Germany.
Most UK multinationals have made far larger commitments to the USA and to Asia than they have to continental Europe. Some have found too many cultural and business model barriers to establishing in Europe. Most have found it easier and more worthwhile to establish in the USA. Perhaps the enthusiasts for the single market writing to this site could help us as to why this is true.
July 20, 2017
JR I’m no Euro enthusiast but if you look you will find lots of British owned businesses in Germany. It may not be to the level of our involvement in the Netherlands but they are there. Incidentally TESCO seems to be everywhere in Poland with M&S being in the big cities too. Perhaps there are easy pickings to be made there than in more established market places to the West?
July 20, 2017
Here is another story that you will not hear about on the anti British Broadcasting Corp. http://markets.businessinsider.com/news/interestrates/German-Economic-Confidence-At-4-Month-Low-1002182505
Perhaps the reality of China becoming a serious competitor around the world, rather than just a customer for German goods/services is beginning to hit? The Euro has killed off demand in Europe and now the plan to export into the emerging markets seems to be going the same way.
July 20, 2017
Having lived in southern Germany including Stuttgart, Heidelberg and also Berlin for over four years, I have seen little evidence of English businesses, apart from so-called “English pubs”.
July 20, 2017
About 1200 UK companies are operating in Germany through subsidiaries or affiliates, employing 220.000 people. See the British Chambers of Commerce in Germany website
July 20, 2017
DRW
If there are lots of British owned businesses in Germany please name a couple of them.
July 20, 2017
Kwikfit and Ernst and Young. Being an employment expert you should have these facts at your fingertips
July 21, 2017
DRW
As an employment and business expert at least I know the difference between a company owning a business overseas and a branch office or subsidiary of a British company with an overseas affliate operation.
Why being an expert on the employment market irks you so much Ive no idea but trying to bring it into every conversation when its not remotely relevent is pathetic, do grow up
July 21, 2017
Rolls-Royce Aerospace – Germany
Vodafone Mobile – Germany
Reply Yes, Vodafone’s German acquisition is a rare counter example, but the overall balance is massively the other way.
July 21, 2017
Yes, correct, though one has to question why?
Incidentally, Primark is another outstanding success and shows how it can be done correctly!
Interestingly, I was spending some time in Cologne when M&S opened in there. It was a complete disaster. Reason: M&S did not understand the market and placed their retail outlet adjacent to one of Germany’s most well-known, highly modern and successful premier department stores.
M&S was immediately shown up to be a highly conservative, expensive, non-interesting enterprise and consequently, customers stayed away. I personally could not believe how old fashioned and unadventurous the M&S department store was. Dreadfully arrogant M&S management decision. When my wife and I entered the store, we thought we had travelled back to the eighties! My wife remarked “M&S will not last the year” and it didn’t!
Conversely, Primark opened in Cologne in 2016, was an immediate success and are now opening in a further 30 locations around Germany. Very simple business model. No management arrogance here. Primark is a modern, low cost, no frills, good quality departmental store (akin to Aldi and Lidl) and customers flocked there in their droves. Primark did their market analysis, found their niche and will be become a retail powerhouse in the coming years.
Lessons for all companies wishing to enter the German market…do your homework. Remarkably, M&S did not!
July 21, 2017
Tesco also have hundreds of stores in Czech Republic, Hungary and Slovakia.
July 20, 2017
The French, Italians and indeed the Germans have always been inclined to focus their consumption on domestically produced goods and services. They are keenly patriotic in that sense. They almost see it as their national duty. In the UK, we are far more open and liberal regarding our purchasing habits. How odd therefore that the UK is labelled xenophobic and insular (we aren’t) and the EU’s triumvirate are thought to be open, liberal and outward looking (they’re not)
It does show the power of the political narrative to pervert perceptions of reality and propagate stereotypes. People choose to believe what they are told rather than what they can with their own eyes. Pro-EU forces are keen to exploit this weakness and reinforce the idiotic idea that the UK is withdrawing into itself by leaving the EU. What the UK has been doing of course is liberalising our economy and looking outwards BEYOND THE EU. It is the EU that is insular
Far too many of us willingly suspend our critical faculties when presented with arguments by so called ‘experts’. The vile BBC bombard its viewers with the narrative that being in the EU is a positive while being out of the EU equals doom. This propaganda organisation has caused so much damage it almost defies reason that they’re still allowed to continue though that’s testament to gutless politicians especially in the Conservative party.
If anyone needs reminding of how weak the Eurozone is then one only has to look at Target2 imbalances with the EU. Germany is the EU’s main creditor nation and engine of the Eurozone but it is owed around E850bn with EU states like Italy, Spain and Greece being unable to satisfy their obligations.
Maybe the BBC need to spend more time looking at the weaknesses of the EU, the EMS and the ECB rather than their pathetic obsessions with race and immigration or should I say using their monopolistic power to indoctrinate their viewers
July 22, 2017
Absolutely agree!
July 20, 2017
To take a specific case. It is unsurprising that Boots has no branches in France where there are very restrictive rules about pharmacies. There are restrictions on who can own them and how many they can own and existing pharmacies can keep out competitors. In exchange for these restrictions, the French pharmacists have a more important role in the health system than English ones.
These differences are all part of the single market in services which doesn’t exist.
July 20, 2017
I think in the food sector it is probably something to do with restrictive practices in the labour market in those countries, it is expensive to hire (and fire) staff, more so than in UK and much more so than in USA, Poland, Asia etc. I have found that in my industry, we have withdrawn from having offices in Belgium (say) because staff costs are simply too high and (frankly) it is almost impossible to fire low-performing staff.
July 20, 2017
My experience of opening and running a business in France explains at least to me why most UK companies would shy way from opening there. Draconian and costly employment laws, red tape and French xenophobia were what I found and if I had known about them in advance I would not have bothered. It all smacked of protectionism the one exception was French healthcare oddly enough as provision was competition based. Hence the quality of customer care was excellent. I suspect much of the rest of the EU like France have all some form of practices that are not as business friendly as those that can be found in the UK. So are a deterrent to opening here.
July 20, 2017
‘My experience of opening and running a business in France explains at least to me why most UK companies would shy way from opening there. Draconian and costly employment laws, red tape and French xenophobia were what I found and if I had known about them in advance I would not have bothered’
– and you think opening and running a business in Japan, India or Brazil is going to easier?
German products and services export really well both within the EU and outside the EU. Perhaps we just need to make more products and services that people want to buy in general (I think British products and services are great, but clearly people within the EU and outside the EU don’t otherwise we’d be exporting like the Germans). With complaints about the EU just an excuse.
July 20, 2017
I am not disputing whether or not it is true because I do not know.
What I do know, however, is that unless we stay in the EEA by joining EFTA, the European Union Laws are going to screw us. When we become a third country on 30th March 2019, the EU is going to make us a third country and simply sever all links.
All the stuff about they need us more than we need them is going out of the window. They are not there to help: they are there to obey their laws which are very different from either our laws or from common sense. M. Barnier has tried to point this out several times, but nobody is listening.
As we will see…
July 21, 2017
Mike
I do not understand why you keep on thinking we will be a third (World) Country when we leave the EU.
There are many Countries who are not in the EU who have more power than any Country in it.
China, America, Russia, and another 157 who are not doing too bad either, Canada, Australia, India, to name but a few.
Indeed we would never have joined the EU in the first place had we not taken part in Two World wars, where we were principally defending others, which bought us financially to our knees.
Do you really believe that all trade will stop between the EU and the UK after we leave.
It may well be initially frustrating, with the French in particular playing waiting games at the borders, but they will soon grow out of that, especially if we take some sensible action.
July 21, 2017
We are already third world in many respects. Think and observe infrastructure. Consider education , medical services, housing, policing that has shrunk from dealing with crime, a multicultural society that has devalued British values and does not work. Having studied and compared it with many places around the World, be in no doubt life in the UK leaves a lot to be desired. many failures are a result of belonging to the EU. On leaving will there be the will to correct them?
July 20, 2017
Good morning
Not an enthusiast for the Single Market but would like to add a comment, hopefully not spent in ‘Moderation Purgatory’, about it.
No ! It was designed as a power grab. Which it has. Handing over more power to the ECJ and the Commission.
The EEC / EC / EU has always been about Germany and France. Those two have been fighting over the spoils of the continent of Europe for well over a century. Now they use the EU to seize and control nation states through a combination of bribes, control over national assets and political and economic bullying. No Panzers needed. All the time working to protect their industries through tariffs, subsidies and regulations. You cannot call a bottle of Champagne from Australia, Champagne for example.
The Single Market is a protectionist market and, like all such cartels, it will stagnate and die.
The only reason I prefer the EEA / EFTA is because I believe, over a short period at least (2 – 4 years) it will allow us time to get our act together. But I am prepared to be proved wrong if others are prepared to suffer if they are wrong too. But somehow I doubt much that has been written here will be looked back on and regretted.
July 20, 2017
~
Agree with the general thrust of your argument her JR – which allows certain EU countries to get around restrictions that seem to apply to others.
The EU civil service was built on the French model, which clearly gives France a massive advantage in getting things done because they know how to use that bureaucracy … The Germans are in charge so they can just pull the right strings.
It’s all another example of how unfair the EU can be – there was never a level playing field when it came to Britain – The EU could be accused of racial dishonesty against us!
July 20, 2017
British workers won’t get out of bed in the morning, are forever taking sickies and just not turning up. That was my experience twenty years ago when we set up in Italy and Spain. After a lot of trouble and some tears we sent them all home and instead employed Polish and since then we hadn’t an ounce of trouble- sorry to say
The same goes for British business, somehow we think the whole world owes us something and are not prepared to put in that special extra effort needed to succeed in europe- it’s much easier for businesses to replicate themselves up and down the country where we have a home population of 60 million rather than looking outwards into europe and maybe having to learn foreign languages- that would be too much trouble. The plain truth is that the british over the past decades have largely grown into themselves and are a bit lacking in the something necessary to face the confident Germans and well grounded French. My opinion
July 20, 2017
Setting up business in the UK is easy and welcomed.
Conversely France and Germany are rabidly protectionist and have draconian labour laws.
I for one would not relish running a business over there as the US tyre manufacturer found. He eventually closed the factory as he couldn’t make it pay..
I worked for a French company and frequently we went over to service machines because of the demarcation over there.
It was cheaper to send us including hotels etc.and get the machines back within the week rather than 2 weeks or more using local staff.
July 20, 2017
Decades ago I created business in France at the time against the wishes of my joint managing directors. The latter says a lot. They had been to a machine tool exhibition in Paris and discovered that everyone spoke French. My efforts were successful and our two heroes were then boasting about it in the local press. I didn’t merit a mention of course. I left and ran my own business, they along with the company disappeared.
In answer to your why question. Language and a different legal system, corruption and protectionism in many countries, and a complacent arrogance that what works in the UK is good enough for Europe. If you are going to immerse a business in a totally different market then that market needs to be carefully researched. Labelling, sizing, taste in the clothing business are paramount and different. Thinking of one company you mention, they have a problem getting it right in the UK so the many different markets in the EU would be a challenge too far.
On a positive note, the aircraft industry seems to succeed. I remember one test pilot friend telling me you argued your case in French in Toulouse, obtained agreement and then spent the next five years fighting for what had been agreed.
July 21, 2017
Some similarities with the referendum result then.
July 20, 2017
Depends which business sector you look at
July 20, 2017
I think this is a diversionary argument.
I would ask why have so many of our businesses been sold to foreign buyers?
Each time we sell a successful and growing business it loses the opportunity to expand into foreign markets for our benefit and all subsequent profit goes overseas to further impoverish us.
We need to change our disastrous policy of short-termism. There have been a number of new enterprises of strategic importance and others which, as soon as they got to viability were offered for sale of a matter of policy. As well as long established businesses. There are more coming along. That is a perverse form of thinking and over the years has forced us and will continue to force into a state of dependency.
We should not be worrying about why we are not more active abroad, we must defend our own interests here first and stop the sell-off policy.
July 20, 2017
The single market means UK companies can set up in France & Germany but perhaps commercially choose not to – labour laws, social taxes , etc. Perhaps more significant is that the single market enables 40%+ of our exports in goods & services to go to the EU. Maybe it is just a case that with some countries it is easier & more profitable to make xyz in the UK & then export it to the relevant country (until we leave the single market, when everything changes).
July 20, 2017
There are barriers to entry, different tastes, language barriers and legislative barriers (particularly in establishing pharmacies).
I am no fan of supermarkets at all but French ones are certainly far more in keeping with my tastes in food than UK ones. They have a far larger range, often better quality meat & chickens, far more cheeses, more variety of fruit and veg and far better seafood counters.
Their non food offering are rather better too. This I suspect mainly as their customers demand more quality to compete with french street markets. Lots of land in France less planning issues and so little shortage of buildings that can be used as supermarkets.
Even the upmarked UK ones like Waitrose are very disapointing in comparision to the better Fench ones. I often cannot even buy boudin noir, tripe, whelks, rasor fish, oysters, hake, brill, langoustines, any decent quality pates or the likes in UK supermarkets. Peaches are often crunchier than their apples and much of the fruit cherries, apples, strawberries, raspberries, tomatoes, apricots for example are often bland, watery and fairly tasteless.
Their smoked Salmon is far too wet. Not really smoked salmon at all.
One Waitrose I go to has far better apples and cherries growing in their car park than offered in the shop.
Did the EU not in effect force the UK to reduce their excellent apple orchards in Kent and elswhere massively?
July 20, 2017
Isn’t it a concern that France and Germany have “nationalisation barriers, Government controls and directions to impede similar investment” by the U.K. in their market? How can a market be in any sense “Single” if such fundamental differences still exist? Factor in the drop in Sterling and we’re offering up an open goal for the EU27.
July 20, 2017
When I was working for a software house , we had two customers in Le Havre .
Le Havre chamber of commerce tried really hard by subsidising a short take off and landing shuttle service run by an Air France subsidiary to London City or was it Gatwick .
However , the customer’s staff lacked dynamism . They got two consultants in from Cap Gemini who were doing more work than the other 398 combined .
My employer lost money on both contracts and one of them was a significant factor in sending us to the wall .
They were so risk averse that they were too scared to push software live . They had no commercial acumen and could not get on with people who had .
In addition I’ve personally lost money when I have invested in France and French speaking Canada . The opportunities seemed to present themselves at a discount for some reason …..
France is best reserved for holidays .
Belgium on the other hand was a great place to do business .
July 20, 2017
I see that the BBC is trying to spin the pay revelations into a gender pay issue. The real question is why so may people, with so little talant, get paid such large amounts. This when so many would work for the BBC for virtually nothing.
You can only get rid of the gender pay gap fully if you actively discriminate against men. This as men are far more likely to study stem subjects and in general are rather more motivated by money. Many women make very sensible work life balance choices for their families and take career gaps.
July 20, 2017
The UK is a soft touch. No other country would allow leading companies like Cadbury etc to be sold off to foreigners (and jobs and profits to be shipped overseas). They would adopt a more nationalistic approach. Unfettered globalism is no more in this country’s interest than is remaining in the EU.
On radio 4 ‘Today’ programme Liam Fox has just stated that going to WTO terms is currently being worked on as a contingency to no deal being agreed.
However, the BBC had the final word with Kuenssberg claiming that a transition was now increasingly likely.
We do not want a transition/delay and that was not what Fox said either.
July 21, 2017
Remarkable that you listen to the BBC in any shape or form, and in particular the overpaid Kuenssberg?
The BBC should be visited as a last resort and then only for a good laugh!
I do, however, agree with you regarding “The Profit Isles”…..The UK is a soft touch and has been for many decades. Thank you, Politicians, once again!
July 20, 2017
Two main reasons I believe:
1 the lack of a real “single market” in the EU-one with the same preferences, cultures and language across the piece, cf the US
2 we have an Anglo Saxon business culture – frankly it will always be easier for us to set up and do business in New Zealand or New York than in Nantes or Nuremberg.
July 20, 2017
British business men are keen to sell out to foreigners to make a quick buck. No sense of wishing to strengthen the UK. In France and Germany the culture is more nationalistic.
July 20, 2017
The French and Germans have always been more patriotic with their purchases than the British. You only need to look at the cars they drive. Tesco has tried many times to break into foreign markets, including the USA, and has often failed. Itās a shame as I think British supermarkets are the best in the world. As for Aldi and Lidl I do wonder if their products are offered at a discount to break into the British market. We have these shops in Spain and the price difference with the other supermarkets is minimal. I have noticed with Aldi that they look at the products the British love and then copy them even down to similar packaging. Iām not a fan and much prefer Morrisons.
July 21, 2017
Christine, you make an interesting point.
The difference, however, is the profit margins made in the UK as opposed to Spain and other continental FMCG outlets. My daughter is a Business Analyst in the international FMCG retail industry and has pointed out on numerous occasions how British supermarkets have been ripping off the British customers for many years.
There was so much profit margin within the UK FMCG industry Aldi and Lidl walked in, reduced their profit margins to hit a niche position and have created havoc in a hitherto FMCG cartel ever since….to the benefit of UK customers.
Some British supermarkets are good, but best in the world, sorry I do not agree, having seen many overseas supermarkets on my travels around the globe! Although my wife is also a fan of Morrisons and believes, on the whole, British supermarkets are superior to German supermarkets…and she is German?
July 20, 2017
Maybe our future has always been to face the open sea. To paraphrase Churchill.
July 20, 2017
Good Morning,
Instead of sending UK financial capital offshore would it not be better to support UK exports of goods manufactured in the UK, to boost employment and reduce the trade deficit. To this end why don’t you suggest to the government to spend 30% of the foreign aid budget on establishing/improving our trade representation around the globe? We are notoriously modest in our export and sales competence, this needs to be improved urgently.
July 20, 2017
“Why havenāt more UK businesses been able or willing to build long term businesses in France or Germany?”
Perhaps, despite fashionable views to the contrary, their gut instinct is that there is no”long term future” for Germany in particular and for France by the nature of being its close bedfellow.
Looking at history of the last 75 years…not a huge “long term view”, it can be seen Germnany is extremely unstable. Longer still, more unstable, longer still even more unstable politically and economically. Can it be denied that Germany and France have just lost the UK as a tripartite dream ticket to their own stability and security?That despite France’s best efforts Germany is at loggerheads with Greater Russia, still, after more than 100 years of bad relations with Russia in every context imaginable?
July 20, 2017
I’ve never really understood the point of opening up a business in another country when they already have similar businesses, unless your product is considerably cheaper or far more advanced than what is already on offer.
We’ve sold out many of our utilities to the French and the Germans, wouldn’t it have been far better to continue investment in our own country in a market that we know? I believe it was extremely foolish for the government to have allowed this to happen, the foreign companies have no real interest in things like security of supply, just profit! At least pressure could be applied to a UK company. And we have no similar investments in France or Germany because they won’t let us. Total madness!
Surely, real two way investment is when we go to a country and start supplying something they need but are unable or unwilling to produce themselves and they do something similar here, not wasting effort trying to do something that is being done already.
As for foreign investment here, I fail to see why what advantage there is to the UK in our companies being taken over by foreign investors with all the profits going abroad. In what way is this to our countries advantage? The French and the Germans seem to have got this message, but we are happy to sell our assets to anyone who comes along with the right money. Good for the owners, maybe, but not good for our country.
July 21, 2017
Being in the EU didn’t protect us from this. Jobs and factories were outsourced apace – labour imported to compete for the jobs remaining. From the government perspective rising population is economic growth with resultant rising house price rises increased wealth.
Now the millennials have been cut off, socialism is innevitable. The Tory vote will diminish.
July 20, 2017
Aldi and Lidl in the UK have yet to face and endure the long term pension responsibilities of its workforce nor the consequences of reducing profit margins to the verge of their own long-term ruin
July 20, 2017
JR,
I have worked across Europe (non-UK) for the last 20 years (plus) and have noticed (to this day) a certain reticence from potential/target clients to deal with any supplier who is not ‘local’.
When I say reticence, they are very open and vocal about it, until their ‘local’ supplier can’t do the job, at which point they become a tad more flexible. However, to be fair to them, once you have been given the opportunity and delivered, they are then normally very loyal as long as you don’t over promise and under deliver (ie. it takes some time to gain their trust and you’d better not abuse it!)
Be interested in hearing if other people have noticed the same and whether they feel that this is/isn’t just a mainland European ‘thing’…
Slightly (!) O/T, but what are your thoughts on the news that the UK has signed up to the EU Combined Defense plan and Forces?
I would have thought it would have been better to delay that until post-talks (or at least, make it part of the talks)?
July 20, 2017
Why havenāt more UK businesses been able or willing to build long term businesses in France or Germany?
The CBI says many of its members “are going to” do just that. It would give us all a refreshing break if the CBI itself were to relocate to Germany. Hopefully they will be far enough away so we cannot hear their bleating and moo-cow moaning.
July 20, 2017
France has so many restrictions on who can be employed, it is obviously ment to be that way, and shows the idea the French have regarding the Single Market.
Take a truck license; A British Class 1 (C & E), it does not allow an experienced British truck driver to be employed, driving a truck, in France! You have have a France (Femo) license, as well as, a normal truck license.
But, that’s nothing compared with the trouble the driver will have, if he/ she doesn’t speak French!
And to suggest places like Belgium, NL, are free to trade, suggests you haven’t tried!
As a Freelance contractor, with a GB Limited company, when I last operated in the NL, I had to go to NL, the local council, and get a VAR. I had to have an Umbrella support company, etc,… It costs!
I have given up on the law in Belgium, but I do ( France, Germany, etc,…) max 183 days contracts, and leave, ASAP!
I have no doubt, they see the EU as a means to block those nasty Free Traders, and the outside world!
Regards,
RDM.
July 20, 2017
I closed all of my businesses located in Europe due to “red tape” interference . Offices in Brussels , Amsterdam , Paris and Frankfurt were “handed” over to the local employees . Each location was growing and profitable but the constant annoyance from different sorts of authorities were petty and too frequent . Other offices in the USA ( 4 ) and the one in Tokyo were highly successful and experienced no problems of any sort . All European clients with activities in this country were serviced by staff in London .
The one location in Europe that was retained was in Lausanne . It was a smaller operation and serviced a few large organisations . The Swiss welcomed outsiders subject to their immigration and residential conditions , however , there were no other features of interference . This office was continued by the local Director when I sold my entire business in 1988 .
I would not want to be involved in any way today with the increased activity of EU bureaucracy . Enterprise and innovation was always looked upon with suspicion and never with encouragement .
July 20, 2017
Of course there are many businesses in these countries owned by funds managed principally from London. Over many decades it has been more difficult to acquire in France and Germany – and in some other European countries – than it has been in the UK, especially in the public markets. In addition of course, the single market has not extended to services, with the exception of financial passporting.
We should welcome iniatives by President Macron to make France more competitive, including tax reductions and de-regulation. Lets make sure we keep the pressure up for the same thing in the UK!
July 20, 2017
If you study Aldi’s business model in greater depth, you’ll also see that it’s success is also based on numerous little details, that overall, give them a big advantage over the competition, in particular, in keep things cost effective for the customer. Similar to the way Ryanair have done so well in the air industry.
With respect, Mr Redwood, i think your remarks here about Tesco versus Aldi are a bit sweeping and your business judgement, here, clouded by euroscepticism. It’s down, basically, to the business model not the EU!
July 20, 2017
I’m afraid part of the problem is that too many British consumers have no loyalty towards British products. In fact, some are clearly of the opinion that, if it’s British, it’s no good. Whilst that may have been true back in the bad old days of the 1970s when Britain was the sick man of Europe, we have moved on considerably since then. By contrast, French consumers are generally loyal to French products, German consumers to German products, and so on and so forth, whilst many British consumers will buy anybody’s product provided it’s of the right specification and the price is right. The large number of German cars on our roads (including Fords which are manufactured in Germany) is clear evidence of this. Consequently, attempts by British retailers to open stores in continental Europe were always going to be doomed to failure!
July 20, 2017
It is easy to say there are “Lots of British owner Businesses in Germany” but why do you not name them? Are they not important to our economy?
JR has listed the big Retailers who, no doubt, would invest more in Europe IF they were to be profitable but EU red tape and add-on taxes do nothing to promote more inward investment. However these deliberately installed barriers do secure the monopolies of the existing store chains and other businesses. The Single Market is just that. No one else can get in on it.
The EU is going no where because it has become a Monopoly of monopolies. Even the poor developing nations of Africa are frozen out because of EU rules and regulations and I suspect Brussels will eventually go the same way as its predecessor, the USSR, for the same debilitating political idealism. The “Closed shop”.
July 20, 2017
We have had plenty of chance over the past forty years to involve ourselves more with business in eu countries but missed out because of a little englander lack of interest attitude..and this is not in any way the fault of the europeans but largely a missed opportunity on our own part.
We have reached this point now where we are going to leave the EU, a free trade market of over 500 million people and with no other prospects in sight, not even on the horizon. History will record it as a kind of madness that came over the people at that time- in fact academics will be busy analysing and writing books for generations to come.
July 20, 2017
The ongoing failure of the Tory Party to protect British business from foreign predation by dressing it up as ‘inward investment’ is a national disgrace: in fact it is treason. As Japan is not in the EU, the Tories cannot hide behind the EU for their disgraceful decision to flog off ARM Holdings. As for the sale of the Royal Mail, has anything stunk more than the Tories deliberately underpricing the issue and than allocated most of the shares to thieving banksters.
The sale of British businesses, often small but growing rapidly, to foreigners is consistent and intense although the lying MSM keeps quiet about it. The point is very clear if you uproot every single sappling which is what this Tory government is facilitating, the only oak trees you will see are those that are very old. The City is important to the economy but it is not nearly so important that it is worth sacrificing the whole of the productive economy to it.
July 20, 2017
I hear some Brexiters talk a lot about remainers ‘talking down’ our country.
But the Germans don’t bother talk up or down. They just get on with creating products and services that people want to buy across the world (as well as inside the EU). Yes, the euro helps the Germans. But it’s ultimately down to the quality of German products and services (and not what i think but what buyers across the world think).
Great products and services sell themselves. The German international exports outside the EU is evidence of this. And so you don’t have to be outside the EU to do well selling to the rest of the world. However, by being in the EU, the weaker companies in your economy are able to benefit from
1. Geographical closeness of countries you’re selling to (makes transport and travel cheaper).
2. Cultural closeness (the Dutch, for example, speak much better English than say the Japanese, and Dutch business culture is much more similar to British business culture than Japanese business culture).
3. Dutch business regulations in general are more similar to British business regulations than Japanese business regulations).
July 20, 2017
Aldi’s success in Australia, is also evidence to undermine your Brexit argument.
You also ignore the marketing success of Aldi which is to focus on simplifying choice. Lots of choice can be one business model. But simplifying choice (whilst offering better value / cheaper products) can be another business model. In a market where so many stores in the UK offer similar the same sort of thing in terms of choice, Aldi’s simplification of choice (whilst offer better value etc) is an alternative model that really works – an alternative model unexplored by the other big stores here in the UK, and if they wanted to copy Aldi, they’d have to radically change the brand or create a new brand from scratch.
I worked in advertising and on a UK supermarket, and it’s an incredibly difficult industry to understand and get to the bottom of, including the psychology of shopping and why people shop in say Waitrose compared to Lidl. But it’s not just down to psychology, there are all kinds of other things – everything from buying to transport, storage, the layout of a supermarket and so on.
To try and blame the EU for the problems of UK current supermarkets today is to trivialise how complicated and challenging it is today to run a successful supermarket today, overall, not just in the UK, or Europe, but in America, Asia or Australia as well.
July 21, 2017
Aldi & Lidl have been in UK for a long time without growing much. This changed primarily for two reasons:
1. Financial crash meant more people were searching for better prices they offered
2. They changed their model from offering more German style products and way of retailing to focussing better on more UK relevant products and way of retailing
I would suggest a couple of reasons why UK retailers are not so present in EU:
1. Not able to properly adapt to local culture, get the right way of working which is quite different from UK. Applies to any business as well as retail
2. UK retailers are currently more concerned about holding back Aldi & Lidl advance in UK than expanding abroad. They are not necessarily doing that well at this!
July 20, 2017
As far as I know, taking the example of the absence of Boots is rather poor, as in both France and Germany there is a clear distinction between pharmacies (where one can get their doctor’s prescriptions) and “drugstores” (for beauty, and diet products and the likes). The former are usually small individual shops with at least one graduate pharmacist in charge, and the latter products available from any super- or hyper-market.
So no real surprise if trying to implement what is basically a US-based model miserably failed.
As for food superstores, it is an unfortunate fact that Continent, Auchan, HyperU, Intermarche, Lidl, Aldi and other big continental similar chains seem to be more dynamic than their British counterparts, specially when these have better and shorter connections with local (for the considered market) producers.
In that respect, I dread the coming of Brexit when most connections with the Spanish, Italian and other Mediterranean producers for fruits and vegetables will be impeded (relative to the present situation).
July 20, 2017
it’s been difficult to find brits who can speak foreign languages – I believe this is because tony blair removed foreign languages from the national curriculum
July 20, 2017
From what I’ve read one problem for M&S was that we did not join the euro and they had to raise their prices when the pound rose against the euro. They also suffered from competition from more modern clothing retailers which did well in France. Their ready food products were popular and sold well.
This is only what I have read. I would be interested if someone who really knows would give an authoritative explanation.
July 20, 2017
I’m just guessing, but maybe it is due to a more mono-linguistic culture in the UK (no offense meant). If the whole world seems to want to speak your language (English, i.e. American) why go out of your way trying to learn foreign languages? So maybe post-Brexit Britain will continue to be attracted to Anglosphere countries. We’ll just have to wait and see whether these new trade-deal love-affairs will be mutual. Obviously I wish the post-brexit UK all the best, as a wealthy UK would be good for the Netherlands as well.
July 20, 2017
A complex and interesting question. Interesting that the “cultural barriers” only work agains the U.K. and don’t seem to be a problem for Germany and France. Its not really an EU issue though as you could say the same about India (which owns a huge chunk of U.K. Manufacturing) and Japan. Factors would include:
– poor quality U.K. Management. I have worked years in continental Europe and Asia and managers are on average significantly better educated a d more professional than in the U.K. Doctorates are quite normal. Think David Davis vs Michel Barrier in terms of preparation and professionalism
– UKs short term ownership structures vs longer term Continental/Japanese/Indian models
– UKs acceptance of foreign business and ownership (again, nothing to do with the Single market as such)
July 20, 2017
‘Tesco, has no shop at all in France or Germany (or for that matter in Italy or Spain’
– That’s because Tesco have gone into partnership with Spain’s El Corte Ingles. You can now buy Tesco products in Spain via El Corte Ingles.
I’ve only done a bit of research, but if i spent a bit more time on this, i think i could make a much stronger case, overall, why you’re wrong about supermarkets and the EU.
Also, if you are right, then why have have the main UK supermarkets slammed Brexit including Tesco and M&S. Here’s a headline from pro Brexit Mail:
‘Prices to soar if we quit EU, say high street bosses: Grim warning of lost jobs and plunging pound ‘catastrophe’ if UK votes Out’
I don’t mean to pick on you, Mr Redwood, but your argument on supermarkets here is seriously flawed. And this is important as you’re making an important case why we should leave the single market.
Regards.
July 21, 2017
āTesco, has no shop at all in France or Germany (or for that matter in Italy or Spain)”
… in the meantime, Vodafone bought half of Europe.
July 21, 2017
Or is 37% of the European market (UK included) made of subsidiaries of the (originally French) Orange group? I agree it is very difficult for one to find their way around the spider web.
July 21, 2017
My experience was in R&D and product line management in a large multinational tech company where I was directly involved with staff and customers across EMEA, NA, China and APAC.
My perspective is that the EU is not a “single” market open to all members. Language, culture, regulation, technical requirements etc differ between countries so you cannot act like it is a unified market of 500m+ but must deal with each country separately. These differences did not disappear even when dealing with a multi-country operator such as O2 or Vodafone.
In that context NA or China offer a much bigger return on effort/investment than Germany or France or Spain or Italy.
It was always lot easier to do business with people outside of Europe – our first sale was in Taiwan, the second in Australia and I gave up responding to RFQs from Germany when it was clear we were always simply being used to help Siemens with it’s feature set and pricing.
July 21, 2017
UK companies are too busy fixating on their pro-EU agendas, and importing cheap EU Labour to make quick profits in the UK and pay less taxes. They have even got there own way with extending the transition timeline into 2023 to continue freedom of movement. Then they better get use to people boycotting there stores and inevitable takeovers from their European competitors