The Impact of Brexit on the Performance of Local Companies as Competitors of Uk Companies in Indonesia and the Indonesian Government in Business Competition

Abstract

Brexit, or the UK's decision to leave the European Union (EU), has significantly impacted the global economy, including Indonesia. British companies in fast-moving consumer goods (FMCG) and energy sectors, such as Unilever, British Petroleum (BP), and British American Tobacco (BAT), face new challenges. Rising import tariffs, regulatory changes, and supply chain disruptions have increased operating costs, affecting product prices, market competitiveness, and business strategies post-Brexit. Conversely, Indonesian companies like Indofood, Mayora, and Garudafood have leveraged this situation to strengthen their domestic market position. Access to affordable, stable local raw materials has helped maintain competitive pricing. Additionally, their product diversification and innovation have expanded market shares domestically and internationally. Support from the Indonesian government and banking sector, in the form of low-interest credit and hedging services, further supports these companies in managing exchange rate risks. This research concludes Brexit poses challenges to British firms in Indonesia but creates growth opportunities for local products. Supportive fiscal policies, active banking sector roles, and local companies’ adaptive innovations amid global uncertainty enhance competitive advantages for Indonesian products in an increasingly challenging market.