‘Grey Market’ Boom Possible In No-Deal Brexit
A no-deal Brexit is getting more real than it ever was as a retail expert predicted that scarcity under this scenario could trigger a boom in fake retail outlets infiltrating the United Kingdom.
In an email to CNBC on Wednesday, Chief Executive of retail marketing firm Geometry U.K., Michelle Welan, said prices may see a hike of over 10 percent if scarcity becomes prevalent in a no-deal Brexit scenario. This could lead to consumers seeking cheaper products from unauthorized online portals.
Welan explained that some unauthorized retailers may be working to purchase products that are out of season or overstocked. These purchases may be made in bulk and in online cases, the prices could be undercut.
The U.K. is fond of open markets wherein recognized brands can be sold through authorized channels or outlets. However, a no-deal Brexit could pave the way for the infamous "grey market" to take root in the country.
"Grey" markets are channels through which legitimate goods are being sold by illegitimate retailers. Even if the products are authorized by the government, the sellers are not, which makes the products have a "grey" label in the market.
Basically, grey markets are legal since the government is allowing the products to have a presence in a particular country. However, these markets hamper sales in authorized retailer shops since consumers would rather go for cheaper price tags.
Welan further noted that some of the products that British consumers can find in online grey markets include furniture, clothing, electronic devices, shoes, and many more. The biggest twist is, these goods will be underpriced, making them even more attractive to buyers.
Meanwhile, the U.K. is faced with yet another challenge as French President Emmanuel Macron appears to have given up on helping the British government negotiate for a deal with the European Union (EU).
According to The Guardian, Macron said ahead of British Prime Minister Boris Johnson's visit to France that renegotiating the elusive Brexit deal "is not an option" at this point in time.
Despite France's apparent pessimism, Germany may still lend a hand. Johnson and German Chancellor Angela Merkel met on Wednesday to discuss Brexit. Merkel presented a challenge to Johnson, asking him to come up with a solution regarding the Irish backstop that's driven a wedge in negotiations.
While Merkel indicated that an agreement may come in two years or so, she said there is also a possibility that a solution can be produced for the impasse within the next 30 days.
During the two leaders' meeting, they agreed that the U.K. now has to do everything in its power to avoid a hard border before Britain leaves the bloc. Macron, on the other hand, said Brussels is not to blame should a no-deal Brexit comes around.