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The implications of a potential Brexit for the European market research industry

By Helen Lester, Sagitta Research

As a UK market research agency, we have many clients in Europe. On 23 June 2016, the nation will vote in a referendum on whether it should stay in or leave the European Union (EU). There is much debate about what a potential Brexit would mean for the British – and EU – economy. In addition, there are the various political and social ramifications of Britain ‘going it alone’. But what impact would a Brexit have on the European market research industry?

Firstly, let us consider how the EU came into existence. The bare bones of the EU were established after World War II (WWII) in order to create a strong economic and political partnership between the member countries. The rationale was that countries that trade together are more likely to avoid conflict. Six countries originally founded what was to become known as the EU – namely, Belgium, France, Germany, Italy, Luxembourg and the Netherlands; with Denmark, Ireland and the United Kingdom joining the common market (as it was then known) in 1973. A referendum held in 1975 resulted in a majority voting in favour of the UK remaining a member state. There are currently 28 European countries within the EU and it is now also a ‘single market’, whereby goods and people can move around without restriction. The EU has its own parliament, which sets laws in various areas. Nineteen of the member countries also use the EU’s own currency – the Euro – although of course the UK does not.

Although two of the most financially robust countries in the world – namely Switzerland and Norway – are thriving despite (or perhaps because of) not being part of the EU, no nation state has ever left the EU[1]. So what would it mean if the British people were to vote in favour of a Brexit? More specifically, what would be the implications for market research in Europe? The answer to this really depends on what you believe would be the benefits and/or drawbacks of Britain leaving the EU. For example, the ‘remain camp’ maintains that many large corporations, especially those in the manufacturing industry, would find it difficult to retain a presence in the UK due to the potential restrictions on the free movement of workers, in addition to the tax, legal and trade implications of a Brexit. Just this month, BMW hinted it might withdraw from the UK if we were to leave the EU, when it sent a letter to staff indicating the possibility of job losses in the event of a Brexit. If many large corporations did scale back – or completely remove – their operations from the UK, this could, in turn, affect the proportion of pan-European market research studies that include a fieldwork element in the UK, thereby potentially reducing the amount of fieldwork conducted by UK agencies. Moreover, if the exchange rate were to be adversely affected (as was the case when the referendum date was confirmed by David Cameron), fewer fieldwork surveys might be commissioned by UK companies in Europe due to the unfavourable costs involved.

However, the ‘out camp’ argues that in the event of a Brexit, it is unlikely the UK would make a full withdrawal from Europe in any case. Norway and Switzerland, for example, are members of other associations that safeguard their economic interests within Europe[2]. Under the Lisbon Treaty, the UK would have two years to negotiate a withdrawal treaty, which could allow, for example, the establishment of bilateral agreements with the EU to protect trade, by enabling the free movement of people for work purposes, easing customs procedures and duties, etc. In addition, it is possible that trade would not be nearly as adversely affected as the ‘remain camp’ infers. In which case, would market research experience a negative impact from this? Without the ties of the EU, the UK would be free to negotiate its own trading terms with all countries, potentially increasing trade relationships with some nations. In this scenario, Britain could become a greater player with some countries, ultimately seeing a rise in the number of multinational research studies involving the UK and UK agencies.

No one can truly predict what will happen at the polls on 23 June 2016, nor can we know precisely how the economy will be affected if we leave the EU. However, market research agencies, such as Sagitta, will be busy interviewing the public in the lead-up to the referendum, as newspapers and media agencies seek information about the voting intentions of the British public.

If you would like to find out more about exit surveys, street interviewing, focus groups or other services we offer, please e-mail us at office@sagittamr.com or please call us on +44 (0)1303 262259.

1. Although not a nation state, Greenland (one of Denmark’s territories) left the EU in 1985.
2.
Norway is in the European Economic Area (EEA), which allows them to remain within Europe’s single market. It was established in 1992 as a ‘waiting room’ prior to joining the EU. Switzerland, although not part of the EU or EEA, is a member of the European Free Trade Association (EFTA), along with Norway, Liechtenstein and Iceland; and it has agreed treaties, which effectively mean Swiss nationals also have the right to live and work elsewhere in Europe.