The Economic Impact of the Brexit Agreement on Tesco Public Limited

This report provides an in-depth analysis of the economic impact of the Brexit agreement on Tesco Public Limited. It begins with an executive summary of welfare economics, the principles used to mitigate the negative effects of Brexit. Task 1 examines the direct consequences of Brexit on Tesco, including decreased profitability, changes in supply chains, and market access. The report details how Brexit affected Tesco's turnover and the need to comply with new regulations. Furthermore, the report analyzes the application of welfare economics principles such as Pareto, compensation, and economic efficiency principles to address challenges faced by Tesco. The study also explores the effects of Brexit on Tesco's market share, distribution costs, and supply chain, and how the government and Tesco are using various welfare economics strategies to overcome these challenges and maintain a strong market position. The report concludes by highlighting the long-term implications of Brexit and the importance of these principles for Tesco's future.

Fundamentals of Economics

Contents
EXECUTIVE SUMMERY...........................................................................................................................3
TASK 1....................................................................................................................................................3
Economical impact of Brexit agreement on Tesco public limited......................................................3
REFRENCES........................................................................................................................................3

EXECUTIVE SUMMERY
Welfare economics is branch of economics. Government of any countries uses welfare economics
laws to improve living standard of indivuds by providing them long term benefits. Britax agreement is
part of them. It is official agreement of withdrawal of Great Britain from European Union. In this
report impact of britix agreement on organization has been anaysised and rincoples, these , concept of
welfare economic uses to overcome issues arises due to Britax agreement is clearly identified.
TASK 1
Economical impact of Britax agreement on Tesco public limited
Britax agreement: It is a written statement signed by countries who withdrawal membership of
European union, it is group of European countries, which are agreed to follow single system of laws.
It provides benefit of union member countries to freely trade, move in one member court to other.
Main aim of European union is to maintain equality in all membership couturiers which help in
increasing market area of all the countries. At preset 27 European countries are part of this union all
these members follow same ethical, political, environmental, trade relates rules, regulations. Great
Britain was part of this agreement since 1975, but due to conflicts arise with other membership
countries the country break this agreement on January 2020. It was one of the biggest decision taken
by government to Britain which will be directly impacted on entire economy sectors of Britain.
Tesco is one of the biggest multinational companies of Britain. It is founded by Jack Cohen in 1919. It
is largest retailer company of Britain which provides various products and services with their supply
chain of supermarkets, superstore, and hypermarket. Target area of Tesco o covered all European
countries and Indian, Malaysian, Thailand market. Profitability rate of Tesco is high even in recession
period of England in 2009 but it was decreases after britix agreement. Following are the impact on
various department of Tesco on this agreement (Meramveliotakis, G., 2018):
 Due to this agreement value of pound had been decrease and it will adversely impacts on
profitability rate of Tesco. It will be decreases since 2016, their turnover goes down.
 Tesco supply their products in European union member countries before the agreement they
distributes their products without paying custom duty, or tax imposed on exporting products, now they
pay all the taxes to sell their products in other countries.
 The company also need to with and follow rules and regulation of these counties to run their
business successfully.
 Target market is of Tesco decrease due to this agreement.
 Due to this agreement growth rate of United Kingdom goes down, prices of products are
incres but Tesco refuses to increase their price rates, due to their decision many companies break
trade agreement with Tesco. The company not provides Jerry ice-cream, Marmite, Hellmann’s
mayonnaise products due to this reason.
 Target market area is decrease due to this agreement.
 Cost of distributing products will also members of European union.

increase as they purchase many products for their duper market from
It will directly impact on the market share of this company. Due to low market share price their
growth rate also decrease.
 Supply chain of Tesco have been reduces as many retailers break trade agreement due to
changes of policies wit membership countries.
Decision of Britex agreement was taken by Britain in order to provides better facilities to their public.
It will positively impact for future time period. Government took decision on the basis of welfare
economy basis. They will apply theories and principles of of company to overcome problems faces by
organizations due to Betrix agreement. Principle of welfare economy followed by government is as
follows:
Pareto Principle:
 Pareto Principle: This principles is help in providing optimum utilization of resources. This
principle followed by governments to provides scares resource equally. Welfare principles are made to
solve problems of what products is made how it is made and to whom it is supply. Britain used
principle of petro to equally distribution resources. It will help in enhancing living standard of low
level people. Tesco considered in big 4 multination corporations of Bretin. Manager of Tesco used
thus principle to resolve their problem related t whom row supply their products and which produce
they included in their supermarkets for their potential customers (Wang, and Hui, 2017).
 Compensation principle: Pareto principle is not create as much impact as this priniciple in
economy. This principle states that bisiness organization those are capable fiannacialy and they have
large market area will be contribute for socaty weslgare. That means they eed tocompnsate for small
and medium size enterprises to run their business .If these business organizations will achive gain then
they will need to compensate their profits for small organization in order to enhance growth rate of
economy, and increment in the living standard of their country’s population. This principle is utility
based on social welfare. Government also provides various benefits to these type of organization
follow this principle. Financial status of Tesco is in strong position even after recession period and
bterix agreement their growth rate may decline but due to past years performance and strong market
position the company maintain their average profit rate in this period. Tesco used compensation
principle for their small scale industries. They will deal with small and local retailer of grocery. This
will provides benefit to local investors as well as the company also. Local investors get chance to sell
their products and company could receiver products at low cost rate. After britix agreement Tesco
purchase products requires to sale in their supermarket from their local retailers as due to this
agreement cost of purchasing products and utilization of services from other European countries if its
very high thus they purchases it from their local retailers and wholesalers suppliers it will help in
increasing profitability rate of small suppliers. Compensation principle will also provides benefit to
Tesco as it will help in increase market share of the company. This principle help in optima utilization
of scares resources of the country.
 Principle of economic efficiency: Main reason of Brteix agreement withdrawn by Britain
governments to increases efficiency, skills, of their public, to give full right of them to uses their
countries resources and make those trade related policies and regulations which reduces strict and
rigid polices impended by European union. For this purpose they use principle of economic efficiency.
Acceding to this principle governments allocated theirresoucrd and formulate polices which while
help enhancing efficiency level of their country. It will also used to increment production rat and
maximization of profit by minimizing cost. Tesco even after major changes in Britain economy will be

successfully maintain their positing in global market area. With implantation of welfare economics
principle an theories. With the sees of this principle organizations will increment their profitsnbility,
productivity, cod effeiceyyn rate.
1. Exchange efficiency: This principle is based on the assumption is that individuals exchange
their goods only with those who gives them best offers and match with their requirement .Government
of Britain uses this principle as it will help in giving chance to each level of scout and organizations to
uses and enchant their resource with best benefit provided companies .Exchange principle is based on
the assumption is that organization will exchange their products and services with those which will be
provided them beneficial services. Tesco used this principle to identify their suppliers and disteicutoes
which help them providing best exchange profit .
2. Cost efficiency: This principle is based on the assumption is that to run a business
organization successfully , managers of ever entity needs to utilized and mangy their resources
effectively.. To minimize their cost of production. Government of Britain uses this welfare economic
principle in order to utilizing scare resources effectively. They uses this pricinipe in order to check
performance status of their industries. Due to britix agreement
3. Production and distribution cost of Tesco increase with high rate. Thus they reduce the rate
they need to follow cost efficiency principal. Main purpose of government of Britain of uses this
principles that due to high cosy of importing goods , business organization reduced with local
suppliers to produce and distribute their products at low cost. It will help ingenerating income from
low level of economy sector to high level of economy sector. This will also impact on the growth level
of the economy. Britain is one of the leading developed country of economy and they used this
principle of economy welfare in order to get long term benefit and maintain their strong position
within the market place (Bahmani-Oskooee, and Ghodsi, 2016)..
4. Technical efficiency principle: This principle is based on tea assumption that production
factors are avail be only on tea condition when it is not possible to make another one. This principle is
applied by government in order to effectively use their scares resource of manufacturing product. As
in this world of uncertainties it is real hard to maintain position in market enviourment, To flexibly
utilized production resource Tesco also used this principle, government of Britain provides them
various faculties and benefits to effectively run their business life cycle.
Allocation efficiency: All the principle is related with this rule , this principle is used in solving the
problem of welfare economy to whom goods are distributed, resources are limited and number of
users of these resource are increase at high rate. Government thus formulate those polices which help
in overcome the principle of distributing scare resources among various users. Britain government
applies these policies in order to distribute their resource effective to each user. They implement those
policies which help in identify those organisations which will effectible uses these resources and not
waste it. Tesco is part of United Kingdom and the company also distrusts for corporate sail
responsibility programme it considered ask important company of England. Thus government
provides them resources at the time when they needed them.
Welfare economy is special branch of economic which deals in solving the quoins related to whom,
how , when resources are distributed to individuals in order to maintain sustainability rate of growth
of the country. Principles theories are applied by government of countries in order to improve their
gross domestic product rate and and provides various facilities to policies in order to can their living

standard. Welfare economy used to enhancing social, welfare of the society, this economy is used to
proper allocation of resources with best uses of them. Due to this agreement government of Britain
faces so many criticism to withdrawal from Europe union their economy scale is decreses life of
industries is going in rescission period, value of dollar dressers, market value of share of all companies
are reduced due to effect this agreement(Chiang, and Chen, 2016). Government of britain uses
various principles of welfare economy in order to overcome problems areas due to this agreement.
Even though it will take more time to Britain to reduce effect of this agreement ,as major changes in
their economy has been arise due to this agreement, all these polices, rills and will directly and
indirectly impact on the profitable level of each induct slowly. Tesco is suffers from many problems,
due to this agreement as their profitability rate goes down their market area decreases due to this
agreement. But with the use of effective policies of government they will overcome with all the
problem arises due to Britax agreement. It take long time to maintain organization but all this policies
positive impacts in future for Tesco private limited.

REFRENCES
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