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DPH Dechra Pharmaceuticals Plc

3,866.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Dechra Pharmaceuticals Plc LSE:DPH London Ordinary Share GB0009633180 ORD 1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 3,866.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Companies' Brexit Challenge: Preparing for the Unknown

20/09/2018 10:59am

Dow Jones News


Dechra Pharmaceuticals (LSE:DPH)
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By Saabira Chaudhuri and Robert Wall 

LONDON -- Some of the world's biggest companies are drawing up plans for the unplannable: a March divorce between Britain and the European Union, in which even some basic parameters have yet to be hammered out.

Big pharmaceutical firms like Pfizer Inc. and GlaxoSmithKline PLC are stockpiling medicine, on orders from the British government, just in case of long delays at the border. Cadbury maker Mondelez International Inc. is boosting supplies of chocolate and other ingredients for the same reason. Airbus SE, the European plane maker, is asking suppliers to keep extra parts -- potentially worth billions of dollars -- on hand ahead of the March separation.

On Tuesday, BMW AG said it was moving up its annual weekslong maintenance shutdown at a plant in Oxford, England, to fall right after Britain's planned departure. It said that will better protect it from any supply-chain disruptions that might stem from a disorderly breakup.

Britons voted to leave the EU in 2016. The deadline to do so: 11 p.m. local time on March 29. That is now just a little more than six months away, but London and Brussels have failed so far to agree on a deal outlining the terms of the U.K.'s exit.

Companies with business on both sides of the English Channel are grappling with many big, unanswered questions -- like whether, or how, goods will be inspected along Britain's now-seamless border with Europe.

In the event the two sides don't make a deal, those goods could be subject to new tariffs. Companies also still don't know exactly how their industries will be policed in the U.K., once the country is outside the EU's regulatory net.

Airbus Chief Executive Tom Enders in July called the lack of certainty surrounding the terms of Brexit "discomforting." British and European negotiators say they expect to reach a deal, but with so little time remaining, both sides have started to warn about the increased likelihood of a "hard" Brexit -- a split without any agreement at all.

The U.K. government has recently rolled out a series of technical papers spelling out, industry by industry, the potential fallout from a no-deal exit. British cellphone subscribers, for instance, might not enjoy free roaming, like they do now, in the rest of Europe. A British driving license may no longer be valid on the continent.

The government also has warned companies about a range of possible disruptions to companies that a no-deal Brexit could trigger. Warning photos on cigarette packaging in the U.K. would have to be replaced, because the copyright for the current ones is held by the European Commission, the government has said.

If there is no deal, Britain would no longer be part of a Europe-wide regulatory network for medicines. The U.K. has said tariffs for goods coming into the U.K. will default to rates set by the World Trade Organization. Frozen orange juice from Spain, now tariff-free, would be taxed at 24.4% based on WTO rates.

Financial-services firms have been girding for Brexit almost since the referendum. Banks like Credit Suisse Group AG, Deutsche Bank AG, UBS Group AG and HSBC Holdings PLC are preparing to move some of their employees out of the U.K. to European cities like Frankfurt, Paris, Dublin and Madrid. Some have begun redrawing contracts previously struck between U.K. units and EU clients to apply to their European units.

The pharmaceuticals industry has been a particular focus of concern. The British government has ordered pharmaceutical companies to increase stockpiles of medicine, to prevent shortages in the event of any customs-related disruptions at the border. Almost three quarters of Britain's pharmaceutical imports come from the EU, according to a recent parliamentary report.

Pfizer said in July that it expects preparations for Brexit to cost it some $100 million, citing regulatory, manufacturing and supply chain issues. It didn't detail those costs. Glaxo put its Brexit bill at GBP70 million, or about $92 million, over the next two to three years. It said it would need to expand facilities in the U.K. and Europe to satisfy regulatory requirements if there is no deal on medical regulation. It estimates Brexit will cost it another GBP50 million a year on things like added customs and administrative costs.

Dechra Pharmaceuticals PLC, a small British firm that makes medicines for animals, said it is spending GBP1.2 million to build a new center in Europe to test products from its manufacturing site in Skipton, England.

"Everything we ship from Skipton into Europe will need to be tested again," Chief Executive Ian Page said in an email statement, "unless common sense prevails."

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com and Robert Wall at robert.wall@wsj.com

 

(END) Dow Jones Newswires

September 20, 2018 05:44 ET (09:44 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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