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Small businesses reported a sharp drop in exports to the EU as another company lamented the post-Brexit ‘nightmare’ of delivery delays and rising costs.
The Federation of Small Businesses (FSB), a lobby group, said 35 of 132 exporters surveyed had temporarily suspended trade with the EU or stopped it permanently. One in ten exporters surveyed said they are also considering giving up trade with EU customers.
Some small businesses have been hit hard by the overnight change to the December 31 business rules, with new red tape and a rush to secure the delivery space, resulting in widespread delays and additional costs. British exports to the EU fell 41% in January, according to government figures.
“It’s a nightmare,” said Sharon da Costa, Managing Director of Fighting Films, a Bristol-based judo film producer – including highlights from tournaments hosted by the International Judo Federation – which also provides kits. martial arts. Half of the company’s business was in Europe before the pandemic and Brexit, but costume orders for a Belgian customer that previously took two days have taken up to a month to arrive.
One option available to large companies is to set up a warehouse in the EU to process orders from customers in the block. However, this would come at a significant cost to small businesses and could mean they need to hold more inventory in order to be able to offer the same product line.
“It is not viable for us to sell to our agents, our distributors in Europe,” said Da Costa. “We are too small a company for this to be viable.”
While trade between the UK and the EU is dominated by large companies, exports are an important source of activity for small and medium-sized businesses. About a fifth of UK small businesses exported in 2019, according to government figures, although this is down from the roughly 24% exported before the 2008 financial crisis.
The government-backed British Business Bank calculated last year that small businesses accounted for around a third of UK exports in 2018, or £ 200bn of goods and services.
Fighting Films, which has eight permanent employees, was forced to consider redirecting shipments of judo suits from a factory in Pakistan directly to retailers in Europe, which would hurt profits. “It will be all the trade that does not go through us,” said Da Costa.
Import costs have also increased from the EU, with the end result likely being price increases of around 5% for UK buyers on some products such as judo mats.
“We were sold a dud,” she said. “Without Covid, people would be screaming from rooftops.”
Matt Griffith, a spokesperson for the British Chambers of Commerce in the South West, said members had suffered more short-term costs “what looks like a permanent deterioration in their competitive position due to rising costs. administrative, administrative and shipping ”.
Small online retailers and food and beverage companies have been particularly affected, he added.
Some companies face an existential threat. For example, the export of live molluscs such as cockles and clams has become nearly impossible, while strict standards for food and animal exports have resulted in a dramatic drop in trade.
Mike Cherry, FSB’s national president, said small businesses face “incredibly demanding and unfamiliar paperwork”.
He added: “Three months after the end of the transition period, what we hoped were start-up problems are likely to become permanent and systemic.
“While large companies have the resources and bandwidth to overcome them regardless, small traders struggle and wonder if exports are worth it.”
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