Brexit Continues To Cause Disruption To The UK & European Toy Business
Brexit continues to be a thorn in the side of people trying to do toy business in Europe. The UK is Europe’s biggest toy market and is in the top 6 or 7 toy markets globally. Any disruption to the UK toy market is therefore of concern to nearly everyone in the business. UK toy businesses are of course facing the biggest challenges, but European toy companies who sell into this major market are also experiencing troubles.
To get specific on the challenges, here are some of the most prominent we are seeing:
- The global container shortage, and resultant delays and shipping cost increases have had an even worse in Britain – aside from the challenges everyone has been going through in this area, Britain’s situation has been made worse by Brexit in two major ways:
a). Stockpiling of stock due to the uncertainty of a situation where a rushed final execution of a Brexit deal left nearly everything unclear has added to the chaos at British ports, and those shipping companies desperately needing an efficient unloading & disembarking process have sometimes just skipped trying to get into the UK’s clogged ports.
b). Shipments from the UK to Europe, and vice versa have been hit by unprecedented red tape, customs delays and refusals, as well as unexpected costs on top of the exorbitant container costs already being incurred.
Some UK businesses have been setting up new warehouses and even new trading entities on the European mainland so that they can just circumvent the issues and have stock ready to service customers on the other side of the divide.
- Political uncertainty has increased not decreased – this is not a politics blog, but in a week where the EU have threatened to invoke emergency provisions in the Brexit deal to ensure vaccine supply, tempers are fraying, patience is less than thin and fraternity is in short supply. This is not creating a very hopeful business environment.
- Couriers are equally disrupted – this is both a problem in terms of sending samples across the Channel as efficiently as we did previously, and also in terms of consumers getting slapped with ridiculous tariffs. Both of these issues are going to cost businesses money and time, and frankly just seems ridiculous. Right now those of us in the UK can send parcels to Hong Kong & China with more certainty and with quicker arrival times than we can to France & Germany!
- Northern Ireland’s situation is a complete mess – some distributors and retailers have just put a hold on supplying Northern Ireland because the situation is such a mess. While this is not the biggest commercial market, it is nevertheless still a commercial opportunity, and in the midst of all the other turmoil caused by the pandemic, creating barriers to trade between one part of the same country and another is beyond a joke frankly.
- Safety & compliance – this area was complex enough when we just had to deal with the already weighty stipulations of EN71 (the EU’s toy safety directive/regulations) but looking ahead we’ll also need to be meeting the new UK standards as well. This will add workload, costs (extra testing – at least the testing companies will be happy!) and more complexity.
So, all in all, Brexit is causing many needless delays and obstructions to doing business both in the UK and from Europe into the UK right now. While there may be intangible benefits to the UK of Brexit e.g. sovereignty and increased democratic accountability allegedly, there are a number of unintended and seemingly unanticipated hurdles now in the way of the toy business in Europe which frankly the business could have done without.
Normally, our editorial voice is upbeat, positive, optimistic and supportive of the toy industry. At this stage though, we’re struggling to find anything positive to say about the additional challenges Brexit is causing. An out of touch political class are seemingly oblivious which is not helping – in the last official questions to the British Prime Minister, not one question came in about how the government would be helping business to deal with the added complexities and challenges of Brexit.
Right now the only positive is that the UK government has been ahead of the game on rolling out the COVID-19 vaccination program, and the current national lockdown looks likely to be eased to some extent around mid-March. Hopefully this will see toy stores allowed to open ahead of Easter, which is typically a secondary sales spike in the year behind Christmas. Fingers crossed on that, and the continued vaccination program rolling out.
We run a Consultancy to toy & games companies around the world. We have helped more than 100 companies grow their revenues. For more information on our Consultancy work: http://www.kidsbrandinsight.com/services