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How Brexit is affecting the design industry

Design Industry and Brexit

Sarah Watson, the founder of the tile company Balineum, has held a text titled “Brexit is SHIT,” with the first line reading “Brexit is SHIT.” And it’ll keep on being shit.’ ‘Overall, it’s a shitshow.’ This is how Charlie Porter, a former member of the House & Garden staff who now runs the online antiques store Tat London, explains Brexit. They paint quite a picture together, as each of them source parts for their companies from the EU and sell to loyal customers inside it. Since January 1, 2021, that’s just scratching the surface of what life has been for countless manufacturers, brands, and creators of large, small, legacy, and fledging businesses. ‘This isn’t a case of teething problems,’ Sarah continues in her letter. This isn’t a case of people not properly filling out paperwork. As a result of quitting the single market, there is pervasive and inevitable trade friction.’

There are the problems that were anticipated – shipping costs and lengthy customs processes – and then there are those that have come completely unexpectedly; interior designer Charlotte Buchanan, founder of Buchanan Studio, said that ‘a fabric supplier in Belgium that we are using for our upcoming product range sold out of thousands of metres of fabric within 24 hours [in December, just before Brexit]’. He said it was the first time he’d ever seen something like it, and it’s put us on backorder, with a four-month wait for new stock.’ However, when consulting with interior designers, company founders, and creatives around the industry, the most common concerns are tariffs, shipping, and delays. Many UK businesses depend on parts produced by artisans in the EU, where many traditional skills are still practiced. This suggests that even British businesses that manufacture their goods in the United Kingdom are hurting. ‘When we import products into the UK, we pay duty on the goods we produce anywhere in the world,’ explains Esti Barnes, founder of flooring company Topfloor. ‘When we sell them to the EU, our EU client pays duty on the basis of the certificate of origin.’ As a result, the goods are taxed twice in two countries. It raises the price of the commodity and makes it unsellable, making us less competitive in the EU market.’

Duncan Campbell is a Campbell resident. ‘We have projects in the UK, Europe, and the United States, and we collaborate with specialist makers all over the world,’ says Rey. Wherever possible, we try to make furniture in the UK, but some items aren’t possible. The workshop in Venice that makes our glasses is extremely specialized, and those skills are simply not available anywhere else. With the additional import duties resulting from Brexit, products with a high production cost and low margins could literally become uncommercially viable for us. We used to hire 200 workers in one of our Murano factories, but now there are just two masters remaining, so we’re literally watching these abilities vanish before our eyes. Anything that contributes to this downward spiral is a disaster.’

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The real fun – and that word is loaded with sarcasm – starts with all of this back and forth, with bringing parts into the UK or sending finished goods out. Maurizio Pellizzoni, an interior designer, informs me that all imports now have new import and export customs prices, which adds an additional £150 to each shipment. ‘In addition, since December 2020, all shipping costs have risen by about 10% due to numerous delays at customs and the additional time it now takes for a driver to arrive in the UK.’ Maurizio’s first shipment to Italy after Brexit cost £350 more than before, owing primarily to paperwork. Paperwork is creating major issues, and most people I talked with said that a large part of the problem is that no one teaches you how to properly fill it out. Duncan Campbell confirms, ‘I believe the European transportation problem is worse than people expect in that no one, even experts, seems to know the rules.’ ‘One of our wholesale customers sent us a 20-page powerpoint with new paperwork reminders that must be included with every shipment.’ There is no clarification even inside what is apparent. ‘Throughout Europe, new administration charges are paid in various proportions,’ says Ali Milam, MD of Porta Romana, adding, ‘No two European countries operate in the same way.’

This isn’t just a problem for the products we love; it’s also a problem for the consumer. Extra customs fees, the need for new hires, and high shipping prices all have to be paid for somewhere, and where better than the bottom line? ‘The extraordinary amount of extra time now needed on all of our shipments means we have to recruit a new staff member to deal with our shipments,’ Sarah Watson explains. That individual must be compensated from our product margins. If you thought we were pricey before, it’s about to get even more so. If we’re going to raise our rates, I want it to be because we’re paying higher salaries to our professional craftsmen or London-based teams. Our price hikes aren’t covering the expense of highly qualified labor. We are just paying for paperwork and bureaucracy.’ ‘Buying British has quite quickly become costly and difficult,’ says Ali Milam of Porta Romana, who agrees with the price increase.

Duncan Campbell succinctly put it when asked about government assistance they have found: ‘The government website is unhelpful to the point of satire.’ The most popular piece of advice seems to be to recruit a professional who understands what they’re talking about!’ ‘One of our big problems is that it’s very hard to find coherent and straightforward advice on how to keep exporting to the UK from Europe and the related duty taxes,’ says Paboy Bojang, who makes cushions in Naples and has a devoted fanbase in the UK. Although there are thousands of sources and pages to read about it, I frequently find it contradictory. It’s causing a lot of concern for us because the UK is our main market.’ When it comes to losing clients, it seems that the issues work both ways, and this could potentially affect EU countries in a way that forces reform. There does not seem to be any hope on the horizon for Sarah – or Maurizio; as Sarah puts it, ‘some in the media or the government will tell you it will get simpler – and maybe the paperwork part will get 10% less shit.’ But things aren’t about to get any better. In reality, when the full implementation takes place in July, things will get much worse for many businesses.’

If you work in the design industry and have been positively or negatively affected by Brexit we want to know. Tweet us @_houseandgarden or DM us @houseandgardenuk.

Published at Fri, 30 Apr 2021 11:58:31 +0000

Article source: https://www.houseandgarden.co.uk/article/effects-of-brexit-design-industry