What Does Brexit Mean For Fashion In The UK? (PLEASE READ POST #1 BEFORE POSTING)

Discussion in 'Careers, Education & the Business of Fashion' started by anlabe32, Jun 24, 2016.

  1. Benn98

    Benn98 Well-Known Member

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    Source: https://www.businessoffashion.com/articles/news-analysis/britain-worlds-cheapest-luxury-market?utm_source=Subscribers&utm_campaign=c16bef20aa-&utm_medium=email&utm_term=0_d2191372b3-c16bef20aa-417355313
     
  2. Benn98

    Benn98 Well-Known Member

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    Of course it's the Belgians and the Germans, why am I not surprised....
    Just deduct the return VAT/customs fees off their refund, problem solved. They can kick up a fuss as much as they like. It's simply not fair that smaller brands must now bear this added brunt purely because consumers don't read the fine print.

    Brexit: Retailers warn they could burn goods stuck in EU

    By Simon Browning
    Published 1 day ago

    UK retailers could abandon goods EU customers want to return, with some even thinking of burning them because it is cheaper than bringing them home.

    They say the new EU trade deal has put costly duties on returns at a time when firms are already struggling.

    The BBC has been told UK High Street and luxury brands have a mounting volume of goods stuck with courier services on the continent.

    None of the retailers would comment on the problem.

    Adam Mansell, boss of the UK Fashion & Textile Association (UKFT), said it's "cheaper for retailers to write off the cost of the goods than dealing with it all, either abandoning or potentially burning them."

    Since 1 January, lots of European customers have been presented with an unexpected customs invoice when signing for goods they've ordered from the UK. These new customs charges are a result of the new EU trade deal with the UK.

    Added costs
    "It's part of the ongoing small print of the deal," said Mr Mansell. "If you're in Germany and buying goods from the UK, you as the German customer are the importer bringing goods into the EU.

    "You then have a courier company knocking on the door giving you a customs clearance invoice that you need to pay to receive your goods."

    Many customers automatically reject the goods, refusing to pay the additional surcharges, leaving couriers to take them away.

    About 30% of items bought online are returned, according to figures from Statista. That has meant large volumes of goods are heading back to the UK.

    When goods arrive back at depots on the Continent, there is new customs paperwork to complete. "Export clearance charge, import charge arrival, import VAT charge and depending on the goods a rules of origin document as well," said Mr Mansell.

    "Lots of large businesses don't have a handle on it, never mind smaller ones."

    The BBC has seen a document that states four major UK High Street fashion retailers are stockpiling returns in Belgium, Ireland and Germany. One brand will incur charges of almost £20,000 to get the returns back.

    Couriers and freight businesses that ship from the UK to Europe are also experiencing delays getting goods to the Continent because of the new customs clearances.

    "It's a bigger change than we thought possible," explained Shona Brown from Speedy Freight, a courier service. "Before, we'd get the order to Germany and off the driver would go.

    "Now we've got to do export entry detailing where was it made, the driver needs to go to the customs office at Dover, then customs in Germany on arrival and then sort out the VAT. There are so many hoops to jump through, it's so laborious."

    "You've got to have manpower to figure out what to do. And with people working from home it's difficult. For small businesses, it is a huge thing for people to do," she added.

    Ulla Vitting Richards runs her sustainable fashion brand VILDNIS from the UK. She has stopped exporting to her fastest growing market, the EU, because of the new customs processes.

    "I've been involved in logistics before. I expected it to be bad and I am used to shipping to the USA which is difficult. But this is just mind-blowing," she said.

    "Every day there is another layer. In the first two weeks we couldn't get answers. For two years we were told to get ready for Brexit. But for these we couldn't prepare."

    She added: "I don't think we can increase prices but we might just have to say that we can't make the business with the EU work. It is a real shame. There is a huge interest in sustainable fashion in Europe and we might have to walk away from it."

    Ulla did speak with the Department for International Trade for help and advice. She was told that setting up a subsidiary distribution hub in Europe might be a good idea: "He told me we'd be best off moving stock to a warehouse in Germany and get them to handle it."

    Retailers in the UK and Europe that trade across the new customs border are all still adapting to the rules. Hauliers and customs agents are facing a steep learning curve too.

    The government said: "Now the UK has left the EU customs union and Single Market, there are new rules and processes businesses will need to follow.

    "We have encouraged companies new to dealing with customs declarations to appoint a specialist to deal with import and export declarations on their behalf - and we made more than £80m available to expand the capacity of the customs agents market."

    It added: "Most businesses use a specialist such as a customs broker, freight forwarder or fast parcel operator to deal with this.

    "The government will continue to work closely with businesses to ensure they are able to trade effectively under the new rules."

    BBC
     
  3. dsamg

    dsamg Well-Known Member

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    It is definitely not fair. At the same time it is interesting when I am seeing people posting here in the UK seeming very surprised about the new exorbitant taxes they are incurring ordering goods from EU websites. Just shows how little information voters really had on Brexit before making such a big decision!
     
    LostInNJ likes this.
  4. LostInNJ

    LostInNJ Rive Gauche. Rive Droite.

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    Trying to understand your comments here...Are you saying that of course it is Belgians and Germans complaining about paying the import fees and had they read the fine print, they wouldn't be in this mess which is unfair to smaller UK brands?

    Perhaps brands in the UK, large and small, should've read the fine print regarding how Brexit would've affected their businesses prior to the vote, and been better prepared to handle this. EU customers certainly didn't have a vote in all of this, so if anything UK businesses should have it noted when checking out and shipping to the EU that customers will now receive an import fee upon receiving the goods.
     
  5. Benn98

    Benn98 Well-Known Member

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    Not sure what's so hard to understand. The real issue here, despite how BBC is framing that article, is that Belgian and German consumers are refusing to pay export taxes. Now if they'd pay it, there would be no issue.
    I don't know of any brand in the entire world who make contingencies or some sort of allowance for returns in the instances where customers just don't want to pay import taxes. This is not the same as someone returning an item because of sizing or defects where the brand still stands to make a sale most of the time. It's entirely different.

    And for the record, the British fashion industry was overwhelmingly against the referendum. The vote tally ended up 52/48 which as you can imagine was very divisive.
    That said, I do believe that BFC should be putting pressure on Greg Hands to come up with a plan and help guide these brands through the transition period but that would also involve restructuring trade agreements with the EU.
     
  6. LostInNJ

    LostInNJ Rive Gauche. Rive Droite.

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    Consumers are paying import taxes, not export taxes. I suppose the issue at hand is that prior to Brexit, the trade was open, so these fees were not imposed on the consumer.

    I'm not saying brands should make contingencies on behalf of the consumer, rather, I am saying that the brands should've been more clear about what Brexit happening (as it passed) for their customers. At that point, the consumer can decide wether or not it is worth to pay the fee to receive an item. Yes, it is a very dumbed down way of doing things and kind of like doing the homework for your customers, but in the interest of saving time and money, that probably would've been a wise move on the brands' part to avoid any of this mess. I don't need your information on what the vote was regarding the industry and the referendum. Once it was passed, they should've collectively figured out a way forward to ease both the brands and the consumer, alike. Can't have one without the other.

    And I don't need, nor appreciate your patronization. I was genuinely confused when reading your statement, so I asked a question. On a forum. As one does.
     
  7. MulletProof

    MulletProof Well-Known Member

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    Can't believe it's been almost 5 years since this thread was started! Partly thankful for the eternal negotiations where absolutely nothing was achieved except producing quality entertainment like the mace incident and the daily amounts of OR-DAH!

    Now, if I may drop a controversial statement, just one person looking at this fire from a distance: if the divorce is so messy, hard, labyrinth-esque and full of drama.. you should've never gotten married in the first place. All societies should value autonomy a little more..
     

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