First, I must apologise for bringing the ‘B-word’ into bmt Promotions blog posts but, the issue has to be addressed. Brexit will no doubt have an effect on the promotional products industry here in the UK.
As it stands, the UK will either leave the European Union on 31st October 2019 with either an agreed deal with the EU or no deal agreed. If no deal is established Britain’s trading rules will revert to The World Trade Organisations. Britain’s exit from the EU has been delayed twice already so don’t hold me to any of this!
The promotional products sector contributes over £1BN to the UK economy and potential trading challenges, issues with currency fluctuations and politicians unable to make decisions on Brexit, are impacting the choices we make with our promotional product businesses.
Issues we may face
There is uncertainty in the future so there are no real defining answers as to what will happen in the promotional product industry once we leave the EU but, here are some predictions of the issues we may face:
- Extended lead times
Promotional items produced and shipped in from European countries that are members of the EU may be delayed due to extra border controls. As part of the Home Office, border controls are controlled checks put into place for people and goods entering the country. If these extra checks on goods were to happen following our exit from the EU, it may extend the lead time of some our products and prolong the time it takes for the items get to our customers.
- Price increases due to tariffs and duties
A tariff is a tax payable when products are imported into the UK from another country. Money collected after a tariff is called a duty/custom duty. As a member of the EU and currently part of a Customs Union the UK doesn’t have to pay any tariffs or duties on goods being imported or exported to countries also within the EU.
When the UK leaves the EU, we could potentially leave the Customs Union too. This means we may have to pay tariffs and duties on products coming from EU member countries. This could impact the price of promotional items and the final price to the customer would likely increase.
- Currency fluctuations
Since the referendum vote to leave the EU was decided in 2016 the pound sterling has fluctuated significantly and is predicted to continue to do so in the months and years after the UK leaves the European Union.
With uncertainty about future exchange rates between countries or probable inflation once Brexit has been finalised, there is a possibility that the pound will plummet and the cost of purchasing goods from European Union members will rise. This again will cause price increases to our business and could impact the final cost to the customer.
bmt Promotions Director, Jack Thomas has a few words on the subject of how Brexit may effect the promotional products market. “Our industry is a relatively small cog in the wheel of the economy. However, we must ensure any negative impact of Brexit, such as extended lead times or price increases, do not affect our customers. Where possible, we will absorb price increases or changes in exchange rates. We will also work more closely with our freight forwarders to achieve the quickest possible customs clearances.”