The current conditions around Britain’s trading relationship with the EU present a number of challenges. Delays, increases to costs & paperwork and tariffs and rules of origin all have made trade more difficult. In response, some brands have been forced to establish fulfilment centres in Europe, diverting investment and jobs away from the UK.
The UK luxury sector has a longstanding and profitable relationship with Europe. It is a key export market, a source of investment for UK firms and an integral part of the luxury supply chain. Luxury is an Anglo-European success story, based on delivering an excellent consumer experience for visiting tourists and residents alike.
The EEA makes up 32% of export sales, however this is a reduction since 2017, when 42% of the sector’s exports were destined for the European market.
Particular challenges around VAT, returns and shipping of samples have been raised as areas where progress could be made.
We recommend a series of measures that the Government could take, in partnership with industry to improve trading relations.
Beyond the policy landscape there are several broader challenges that have hit the sector, with the delays, costs and paperwork causing consumers to lose confidence, while inconsistent enforcement at the border has led to brands struggling with exporting even after agreements to smooth trade have been made.
