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news
EU flag 2Brexit cost bicycle business £250,000 in two months
A Welsh business co-owner says Brexit cost him £250,000 extra in the first two months of this year.
Children's bike manufacturer, Frog Bikes, employs around 50 people at it's factory in Pontypool and has a global customer base, Wales Online report.
However, the affect of Brexit and the UK's trade agreement means that the company has spent much of this year adapting to a challenging new way of doing business.
Co-founder of Frog Bikes, Jerry Lawson, said: "I couldn't say there was anything positive.
"There's extra paperwork, and there's extra costs. And there's a whole lot of unknown."
Mr Lawson co-founded Frog Bikes back in 2013 with his wife Shelley.
The pair were searching for bikes for their children and, after not finding anything suitable, they decided they would go into business creating their own range of affordable bikes for kids.
After three years of growth, in 2016, the company opened its Pontypool factory with support from the Welsh Government.
"The business is growing. The UK [market] last year grew 18%, said Mr Lawson.
Since the company was set up eight years ago Frog Bikes has been selling more and more bikes to EU countries such as Germany, France and the Netherlands.
> Brompton reels from impact of Brexit and Covid
However, in spite of all of its success and continued growth, 2021 has been a difficult year for the company for one reason - Brexit.
Mr Lawson said: "We're getting stuck in customs both on this side and in European countries.
"The paperwork is also incredible. To begin with, some of the countries wanted the paperwork in their language.
"Now we send them a commercial invoice with a whole lot of customs information. Plus, it's four or five times we have to print it."
Until Brexit, standard customs had not been done that way, and the company did not need customs declaration forms for stores in the EU.
The customs declaration includes information about the country of origin, shipping codes, and information about VAT, among other things.
> New bike day turns into £2,000 Brexit nightmare for British cyclist
Additionally, the European stores Frog Bikes sends its products to may also have to pay VAT, courier fees and consignment fees to receive them under the new trade deal between the UK and the EU.
Mr Lawson explained: "Spanish stores are being charged 60 euros per consignment.
"They might be charged a commission or finance fee by the courier. So, they can get the import VAT back but they can't get the consignment fee, and they can't get the commission fee or finance fee that is charged.
"So, if we only send three bikes to them, that works out at about a 50 euros increase to the consumer per bike. And that then means it's a real barrier.
"We are gripping onto them by the skin of our teeth at the moment because a lot of them are very frustrated and concerned.
"I don't know how long we'll hold onto them if we can't find a way around the delays, the paperwork and the extra costs.
"A store we've known for seven years who we've been trading with... came back and contacted me because they're really struggling. They don't know what the costs are every time."
On top of this, to try and minimise the costs for the consumer, Mr Lawson explained that the cut of profits stores in the EU took home from selling Frog Bikes had decreased.
"If we reduce the margin the stores get by 2% or 3%, that means the price increase to the consumers is lower," he said.
Prior to Brexit, the EU accounted for roughly 47% of the company's business. Now, however, Mr Lawson explained he could see that percentage decreasing.
"Unless we find a workable solution to the barriers, the non-trade barriers, we can see that diminishing because we will lose these stores.
"And we know that because we talk directly with the stores. And when we have lots of stores in these markets, and they're all feeling the pain, it has a risk for our business. And the challenge then is, if we lose those sales where will we make it up?"
In addition to uncertainty surrounding import fees for European stores, Frog Bikes, like other manufacturers, has seen growing component costs and a huge rise in shipping fees.
As a result, the company spent over £250,000 in Brexit-related costs by February of this year alone - just two months after Brexit came into effect.
"That's wiped out our profit for last year, completely," said Mr Lawson.
He explained that, in all of his years in business, 2021 was the most difficult period he had experienced.
"We've we've had various different things over the years.
"There was the dot-com burst, you had the banking crisis, but this is much worse. And if I look at how we were faring last year, based on the pandemic, this is much worse than that as well."
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85 comments
UK had that ability (specifically for sanitary products) within the EU, try again.
I'm afraid you're wrong.
https://fullfact.org/economy/did-mps-vote-against-removing-tampon-tax/
Please provide evidence to the contrary if you have any.
The Eu is in the process of doing just this - now due in 2022. This was one of Camerons govts projects, to enact change on EU policy. It would have happened earlier. The procedure slowed - likely due to the state providing the main impetus (UK) bizarrely deciding to leave, so some pace was lost.
So no, not an advantage, it was happening anyway, due to UK influence.
No, not impossible, it is perfectly possible to change EU policy, as the UK has shown time and time again - see above about the tampon tax. Not that we will be able to do so any more......
We can of course ban live animal export, and probably will by the end of the year. Whilst utterly jacking in the ability to influence the rest of the EU to do the same, and so the live movement of animals will continue in Europe, and from Europe too. Seems a bit of a Pyrrhic victory to me...
No Rich, no net gain at all. In fact, a massive loss in rights, protections, trade, cooperation and influence.
But I have learned something! I have finally had a Brexiter tell me what it was all about - a tiny reduction in the world live animal export trade.
Interesting movement of the goal posts there from any benefit to "net gain" 👍 good job buddy.
Please tell me what rights or protections we have lost, I'm so curious.
To be clear I voted remain but there are clear arguments to leave the same way there are clear arguments to remain. Taking your little partisan black and white view doesn't help anyone.
Also we lost influence in the EU but gained influence in the UK, I mean agree or disagree but there are clear benefits from having a greater level of control over your own laws.
Well Hellooooo Mr 1 post
I would expect a net gain at the least otherwise why do it? Just being specific that I don't want some glint in the wreckage being offered as a "gain". More wanting to prevent the moving of goalposts.
But maybe you're right, I should have been less charitable and more specific by saying a colossal net amount of harm has been done to this country and its people.
Every single one of us [I'm going to edit that. Many arch brexiters have done their best to wangle EU citizenship...... Just not available to the majority I'm afraid] has lost European citizenship and the protections that go with it. Rights to live work and learn in the EU have been forfeited. Participating in EU elections. Free movement across Europe. These are some of the key ones, there are many more. I'll let you look them up (I don't think you will). Interestingly we as citizens have forfeited more rights in the EU than EU citizens have lost when in the UK. Again, I'll let you look it up. Oh, please let me know what I have gained in terms of rights and protections - I'd like to understand the net advantage to me and my family....
Noting that overall an incredibly damaging act of harm has been inflicted on UK citizens is not a black and white view. It is the conclusion when considering the net outcome.
Not sure why you think that your voting remain is relevant - perhaps you think you made a mistake, but luckily it worked out alright. I'm going to leave that one to you.
Well done you can count, excellent first reception to the site 👏👏👏 I hope it wasn't too hard, keep at it little buddy 👍
(I can't see how to do the little quote things on my phone being a "Mr 1 post" and all but I'm sure you can work out the context)
I don't think Brexit was a net gain, but that doesn't mean some of the arguments being put forward aren't valid.
Okay you seem to be working from a very interesting view of "rights" by categorising a privilege as a right. Please understand the concept of negative rights before saying you've "lost rights". Also freedom of movement is itself in direct conflict of the rights of the individuals of the country to which one moves
When rights come into conflict you need to select the one that takes precedent, in the case of freedom of movement it basically violates the NAP so the freedom to not have individuals move into your country at will supercedes the freedom of movement of the individual. This is real basic conflict of rights stuff, so looking at rights lost and gained nearly 70 million people gain a right (this would be a true or negative right) and what a few thousand lost a "right" but they can just apply for a visa and do it anyways.
I think it's relevant because you and I land on the same conclusion: Brexit is a net negative for the country. However, you seem to fall into the camp of "the sky is falling! My remoaning overlords have given me the Holy text from on high and all is lost!! Woe is me!". Where as I think the totality of Brexit is a negative but there upsides such as (trigger warning since this goes against your holy texts), being able to set limits on immigration, having a sovereign parliament, being able to set up new trade agreements and reducing bureaucracy in research funding to name a few.
Again I think we lost out but I also think you're a mindless arse.
And to bring it back to the article in hand, @Rich_cb does seem to be correct, the 250,000 being attributed to Brexit alone looks likes it's being inflated for political points scoring.
The EU had already changed their rules on VAT and sanitary products.
British Sugar beet producers must be over the moon with the cane Sugar tariff reduction, that shortly followed tate & lines donation to the Conservatives.
Without a trade deal universal tariffs are applied to all imports without reciprocal tariff reductions for UK exporters.
The EU have not changed their rules on VAT and sanitary products. They are currently working towards doing so. The change may take place in 2022 if all goes well. If you have evidence that the rules have already changed please post it.
The EU imposed heavy tariffs on imported cane sugar to try and create an EU sugar industry. This cost many jobs in cane sugar refining including huge swathes of Tate & Lyle's UK workforce. EU sugar is far more expensive than cane sugar with the increased prices being passed on to EU consumers.
Protectionism always leads to higher prices for poor consumers in order to benefit relatively wealthy producers. It's not a policy I support.
There are no such thing as compulsory universal tariffs. You do not have to apply import tariffs to anything if you don't want to. The only rule is that all countries which you do not have a trade deal with must be treated equally. Singapore is an example of a country which applies virtually no import tariffs.
Funny I said that earlier on. Looks like that as a reason for Brexit was somewhat premature, particularly as this change in policy was pushed by the UK, and the main reason it slowed was due to our exit.....
Funny you were saying how wonderful it is that Ribble was able to capitalise on reduced competition from Eu [due to import tariffs] only a couple of posts ago. It's almost as if your principles shift with the prevailing wind....
Still waiting for one of your elusive benefits though.......
Don't worry, the governements "independent" review into lobbying will stop this type of thing as indicated with the Minister yesterday stating he doesn't think rules would change.
The Sanitary Products one is a bit of a red herring anyway as most supermarkets had dropped the prices to "absorb" the 5% vat costs AND the Government had also ringfenced the VAT for Womens charities. So removing now for the headlines doesn't change the prices AND the charities lose this funding at a time when they need all the sources they can. Still headlines hey.
But not our export tariffs, and since asymmetry is self-defeating, import tariffs remain. These affect British consumers, not the Treasury, so the government doesn't mind that.
Right.
However, 57% of all imported food comes from the EU. We didn;t need to do anything about that because... welll... the EU was us.
It is impossible to get across to some people how much influence we used to have in the EU, before we became a global laughing stock. Article 50, for example, was written by Lord Kerr.
VAT on sanitary products was reduced in 2001 to the then-lowest option of 5%. However, that is not the real reason for this injustice. The real reason is that those in government were not bothered enough in this country as in elsewhere. We know this because, in Ireland, they were bothered enough to have a zero rate which took precedence when the EU VAT rate came in. If we (or rather the government) had wanted it badly enough, it would have happened. Now it has happened here, and it is also happening in the EU. Not a reason to leave.
I don't doubt that you can come up with things you think the EU has got wrong. That is not a reason to leave. Now we have next-to-zero influence on the EU, so if animal welfare was actually a concern, they would have retained that influence to be able to exert it.
The reality is that Johnson and his cronies and certain liespapers managed a whack-a-mole collection of [fake] reasons to leave. As each was debunked with credible analysis, up popped another slightly more ludicrous than the last, yet told with a straight face. You believed it, and now you realise (or ought to) that there was no substance to any of it.
Those 'reasons' included misdirection over immigration: equating illegal immigration and assylum seeking; misrepresenting the rules; conveniently overlooking the fact that we had control over immigration (including that from the EU) - we just chose not to exercise it, while not actually accepting anything like our responsibility of refugees. So, when you asked about sophism and xenophobia, that is part of the picture: the hostile environment against those in desparate need, while scapegoating Polish plumbers. And when I weigh up that nasty attitude (in the words of one of its leaders) from our own government, versus the improvements that could be made in the European Union, the flag-waving rhetoric makes me sick; and that is why I find zero evidence of any benefit from leaving.
Britain keeps shooting itself in the foot and removing itself from international relevance. The quest is just beginning to turn ourselves around from this nonsense.
Just one credible reason that makes it worth leaving.
Still waiting.
And there it is.
The goal posts are moved.
At the start of this thread you wanted "legitiate (sic), verifiable benefits for leaving the EU".
Now you have been presented with said benefits you have decided to add your own subjective caveat.
At least you can slightly reword your tired spiel next time you post it.
But if you really want to know the main benefit of Brexit then consider the following;
It will have taken the EU 7 years to remove VAT from sanitary products if (it's still an if at this point) they finally manage it in 2022.
Once the UK was free of EU regulations it took us 1 day to do the same.
As an independent nation we are able to move more quickly and act more decisively than a lumbering bureaucracy trying to satisfy the wants and needs of 27 separate countries.
This is true whether the issue is relatively minor as above or a genuine matter of life and death as with Covid-19 vaccine procurement.
The UK, acting independently, was able to make decisions faster and secure more favourable contract terms than the EU.
The EU was once again hampered by bureaucratic inertia and its citizens have unfortunately borne the brunt of that lethargic response.
Does that £250,000 include the component costs and shipping fees?
The wording implies that it does.
If it does then the article is misleading and the headline is downright dishonest.
As an aside, I tried to buy a new Frog bike 2 weeks ago, sold out everywhere.
Didn't do them in your size?
Apparently they don't cater for 90kg riders.
Fat shaming bastards.
I knew you'd be along to defend the Brexit shit show. The point of the article is that he's incurring additional costs that he didn't before. Quibbling over the magnitude of them is typical of you. Where are all the benefits promised by the Quitlings?
Don't say vaccines because they are nothing to do with Brexshit. https://fullfact.org/health/coronavirus-vaccine-brexit/
The magnitude of the costs is intrinsic to the argument.
Component and shipping costs have increased for every single bicycle manufacturer regardless of where they are based.
Including those costs in the total and then implying they are 'brexit-related' is disingenuous at best.
If we want to have a truly informed debate about the costs of Brexit for businesses then need to have an accurate representation of what those costs actually are.
As for the vaccines, I agree that it would have been possible for the UK to do exactly what it did whilst an EU member.
The fact that not a single member of the EU chose to exercise that option indicates that there was significant political pressure not to do so.
It is, of course, entirely speculative but I believe that if a pro-EU party had won the previous election we would currently be embroiled in the same vaccination difficulties as the EU.
Oh dear. The levels of sophistry you Quitlings have to descend to in attempting to defend the Brexit shit show.
If the whole sleazy project was not underpinned by racism and xenophobia, I'd almost feel sorry for you.
I do love this type of argument.
No attempt to engage in the debate whatsoever.
Then accusations of racism and xenophobia.
Please clarify your accusation of sophistry, what part of my argument is inaccurate or misleading?
Maybe he understands his own business better than some random on the internet.
Those Brexshit benefits just keep on coming eh?
Could it be making a sweeping unsupported assertion around business acumen?
You have failed to use facts in forming of your opinion, as there are insufficient data to come to any conclusion about an individual's"business acumen". Which by the way is an undefined element in the context of your statement.
I suppose it could be argued that there is nothing factually incorrect, as there were no facts in you post the first place..
Why, it's almost as if there's a difference between having well-established systems for trading with third countries, established over years and suddenly erecting pointless trade barriers where we previously had frictionless trade.
Please stop embarrassing yourself.
Oh good, conspiracy theories now, who's for popcorn?
Are you suggesting that he withdraw from EU markets, because at this time there is increased demand in the UK?
Do you know that the UK demand would take all the bikes ccurrently being shipped to fulfil orders from the UK, or are you guessing?
Do you understand the concept of trade deficits? Do you think it is a good idea to stop exporting because of brexit? How does this benefit the UK?
Perhaps part of the reason why you can't buy one here is that he has essential deliveries held up in customs.
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