UK-EU trade ties conditions pose challenges for luxury brands: Walpole
The current conditions around Britain's trading relationship with the European Union (EU) present several challenges for luxury brands, with delays, increases to costs and paperwork, and tariffs and rules of origin all making trade more difficult, according to Walpole, a UK-based trade association representing the interests of British luxury brands.
In response, some luxury brands have been forced to set up fulfilment centres in Europe, diverting investment and jobs away from the United Kingdom.
Beyond the policy landscape, there are several broader challenges that have hit the sector, with consumers losing confidence, while inconsistent enforcement at the border has led to luxury brands struggling with exporting even after agreements to smooth trade have been made.
The conditions around Britain's trading relationship with the EU present several challenges for luxury brands, with delays, increases to costs and paperwork, and tariffs and rules of origin all making trade more difficult, according to UK trade body Walpole. Particular challenges around value-added tax, returns and shipping of samples have been raised as areas where progress could be made.
Particular challenges around value-added tax (VAT), returns and shipping of samples have been raised as areas where progress could be made.
Walpole, in its new 'Trading with Europe' report outlining the 'Brexit effect' on the luxury sector, recommended a series of measures that the UK government could take, in partnership with industry to improve trading relations.
These include pursuing further bilateral trade agreements, similar to the UK-Italy deal agreed earlier in 2023; arranging an agreement with third-party logistics firms to standardise processes; negotiating an increase to the €150 VAT threshold; supporting UK businesses seeking to export through the tax system; and striking a sanitary and phytosanitary (SPS) agreement with the EU.
These measures should also include backing a consumer confidence campaign to win back European customers and stopping the proposed increases to paperwork and introduction of physical checks on foodstuffs entering the United Kingdom from the EU.
Walpole research has found when accounting for global market conditions, EU exports are 43 per cent lower than they would have been without Brexit.
It called on the UK government to join the Pan-Euro-Mediterranean Convention to support automotive and textile exports.; introduce a new digital labelling scheme to reduce complexity; and bring together freight and courier companies to deliver consistent approach to trade rules.
Fibre2Fashion News Desk (DS)
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