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The “Yes” hidden consequences on the Scottish market

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The referendum seems to be having more to say than just whether Scotland should leave the United Kingdom, or stay. Chairman of the John Lewis Partnership, Sir Charlie Mayfield, has previously said that there would be huge financial repercussions if Scotland abandons the United Kingdom.

The reason being is due to the fact that retailers would have to increase prices in the newly independent Scotland, since the higher prices of transportation of goods to Scotland would no longer be shared in the rest of the United Kingdom. Trading costs in Scotland are already higher than the rest of the United Kingdom and even though major retailers such as Asda, Tesco, Morrison and Sainsbury’s affirmed they support the extra costs with the money made in the rest of their UK operations, that they would have to end this practice in case of a final Yes vote.

“It is likely that in the event of a Yes vote there will be business risks,” said Sir Charlie Mayfield. “They [the costs] are already for most retailers actually somewhat higher in Scotland than they are in the rest of the UK. And there’s a big question mark about what would happen going forward” he added.

Major retailers avoid being partial in the independence debate, as they state that it is a matter of the Scottish people. However, the opinion that food prices would rise in the event of a ‘Yes’ vote, seems to be shared.

Asda CEO and President Andy Clarke said “if we were no longer to operate in one state with one market and – broadly – one set of rules, our business model would inevitably become more complex”. He then added “we [Asda] would have to reflect our cost to operate here”.

The Scottish National Party affirms that “prices will not go up”, however, a Morrisons spokesperson said: “If the cost of doing business was to change in an independent Scotland, then Morrisons would have to consider raising or indeed lowering prices in that independent Scotland”.

Whatever decisions are to be made by both the Scottish population and after by the retailers, Tesco suggests they will continue to offer the most competitive prices in Scotland

Published on Thursday 18 September by Editorial Assistant

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