It has been four months since the transition period ended. What is the current mood among the BPMA members? How have you experienced these months?
Carey Trevill
Carey Trevill: Since the end of the transition period, UK distributors and suppliers have been facing some immediate and complex challenges. The FTA (Free Trade Agreement) was concluded very late in the day and whilst we knew what was coming to a degree, the preparation time was still limited, especially as the UK was still caught in the grip of lockdown due to the pandemic. We are getting used to the new rules. However, timing and costs have changed in some instances, whilst the expectations haven’t. Carriers compounded many issues for our members and the wider industry – you will remember the scenarios at the ports at Christmas time! This has improved, but it is very time-consuming ensuring the right declarations and charges are applied.
The BPMA is in close contact with British Government officials to raise awareness for SMEs in the promotional industry. What are the biggest challenges at the moment?
Carey Trevill: That is an expansive question! For our industry, there are burdens that are expected to be carried by the suppliers and distributors, some EU member states have made it hard for UK business to trade. In a meeting on April 28, the BPMA sought the support of the UK Minister for Exports, to help him understand more about the promotional merchandise industry. Representing our members and the rest of the UK industry, we have proposed several solutions to VAT issues faced by companies that trade in the EU.
Do you feel that the special issues of our industry are being heard?
Carey Trevill: We had a very successful meeting. Presenting the Minister of Exports with the challenges faced by an adjacent industry such as promotional merchandise, the BPMA Chairwoman, Angela Wagstaff (Founder of Allwag Promotions), and the BPMA Board Member, Andrew Langley (Founder of Juniper Products), highlighted the case for distributors and suppliers. During the meeting, we also emphasised the extensive work the BPMA has done for its members to provide information, training and sessions in a bid to help members understand the new rules. We are continuing discussions with Government departments to look at solutions to help our industry sector and of course others in a similar situation.
Are there any figures that indicate to which extent exports in the British promotional products industry have dropped since January?
Carey Trevill: It is hard to break down the devastating impact that has hit every economy during the pandemic coupled with the impact – and opportunities – of the end of the transition period. Overall, the industry has reported a decline of as much as 60% in business versus a normal year-on-year business. In a recent BPMA industry survey, of those who responded, 56% reported significant challenges with customs and delays at borders. 41% reported an immediate loss of business in January. This has improved since the start of the year and our next findings are expected to show a more positive picture, however, what the true extent of loss may be still remains to be seen. On the other hand, some respondents actually reported that they had recorded an increase in opportunities during the same survey.
Are any companies considering stopping their export activities altogether against this backdrop?
Carey Trevill: Sadly yes. Infrequent exporters, who have perhaps invested less in exporting have found the process hard and costly with EU member states delaying or rejecting applications for EU VAT numbers. At the same time, experienced exporters are finding the overall cost burden very challenging and whilst there is contemplation that this will ease once some of the external factors such as carrier, freight and the correct application of charges are clarified, doing business in the EU definitely means having to invest more man hours in dealing with the new situation.
What is your prognosis for the British economy over the coming months?
Carey Trevill: This week, the Advertising Association (which the BPMA is a member of) and WARC released the advertising expenditure report; a report we closely monitor due to the impact on spending for our industry. It is now estimated that the total UK ad spend will grow by 15.2% this year to reach a total of 27 bil. British Pounds. The forecast rise will recover the decline of 1.8 bil. British Pounds experienced in 2020 in its entirety, followed by a further 7.2% rise in 2022, when the market will be worth a record 29 bil. British Pounds. The UK is on track to achieve the strongest ad spend recovery of any major global market this year and this puts the UK economy in a position to bounce back strongly post-pandemic. The market changes and dynamics we have seen over the past year have been dramatic, but with every 1 Pound of advertising spend generating 6 Pounds of GDP, the predicted growth this year of 15.2% is good for the UK and will be a welcome boost for jobs and growth in the wider economy. When we consider what role promotional merchandise plays in boosting the UK economy; we know that 1 Pound spent by an SME on promotions and merchandise will bring an eight-fold return on the investment. With the number of enquiries rising as the UK emerges from the latest lockdowns, we are cautiously optimistic but aware of a tough road ahead.
Many British promotional companies are very actively doing business in the EU, and for many years the BPMA has been helpful in building international business relationships. How will Brexit impact the pan-European trade in our industry and the ties between British and EU companies in the long term?
Carey Trevill: That is a good question, personally we are confident that our EU relationships will continue to endure. Life has changes and indeed the stance of UK business has had to change post-Transition. Many UK firms had already taken the decision to set up subsidiaries in the EU to ease trade and we can see many companies continuing to work together to deliver brilliant work for their clients. However, we may see some relationships change due to the new trading rules. The true changes in our trading relationships may not be seen in full until later this year as the world comes back online.
Which advice would you give promotional products suppliers from the EU, who want to keep on doing business with UK distributors?
Carey Trevill: We would recommend they ensure that the communications are clear from the outset. Rules of origin have had a big impact on the status of goods between the two markets and it is essential to understand the duties that may apply, the deliveries and ownership of goods. Furthermore, it must be taken into account that many areas of the world are still impacted and will continue to be impacted by COVID-19.
// Till Barth spoke with Carey Trevill.
Photo: BPMA
