What will a no deal Brexit mean for the bicycle business?

Unless an set eleventh hour deal can be struck the UK has now set a course for a No Deal Brexit, something that has been touted as a huge risk by business leaders in the cycle trade.

With the Prime Minister’s indication that this is the path ahead the business world can now move forward with some certainty, unless there is a final twist in a now four year long tale.

In reality, the work on understanding what comes next is only just beginning and if one thing is for certain, few are 100% what the short and long-term implications will be for their trade. CI.N has sought to find out from those closest to the coal face and for the bicycle industry there’s arguably nobody better briefed than the Bicycle Association‘s Peter Eland.

He told CI.N on Friday afternoon that if No Deal comes to pass then the default Global Tariff rates will come in to play at 14% for bikes, 6% for e-bikes and 4% for most parts.

Of course the situation remains fluid and thus far there have been zig-zags and u-turns galore. It is advised that if one page is saved to your bookmarks for up to the minute tariff information it is this one.

Eland said: “If no deal does come to pass, then UK Global Tariff rates will apply to goods coming to the UK from the EU, as well as to goods arriving from any country worldwide which does not have a post-transition trade deal with the UK, or which can access preferential rates under the future UK General System of Preferences (which will offer reduced or zero rates on imports from developing countries, in a similar manner to the existing EU GSP).”

There remains a hope that a Free Trade Agreement could come to pass if compromises can be made to secure some form of deal. In this instance we’re told that tariffs on imports from the EU’s remaining 27 member states will revert to zero, though customs declarations paperwork will become a added burden for businesses, as it will should a No Deal outcome come to fruition.

For Madison Sportline boss Dominic Langan, the proposed outcome will force the firm’s hand on investing in a separate facility in the Republic of Ireland, as well as appointing new logistics partners.

He told CI.N this month: “We have various contingency plans in place but much of it depends on the final agreement and especially whether there is a free trade agreement. We are prepared to set up a facility in the Republic of Ireland to support our customers there and appoint a third-party logistics partner in mainland Europe to support our export business if required to do so.”

Describing Brexit as “going nuclear”, he adds “leaving entirely is highly risky and combined with the impact of Covid-19, I am very concerned for the country and the possible impact on the economy; which we cannot assume the cycle industry will be immune to.”

For the retailers concern has begun to set in, in particular with many customers having placed forward orders during a period where the bike industry has been short on supply.

On CI.N’s Trade-locked Facebook Group some report forewarning customers that prices may be subject to change depending on the outcome and delivery dates of product.

Regular CI.N contributor Ruth Hargreaves and Tandems.co.uk co-owner wrote on playing it safe: “I have been telling my customers that the price of any bike coming in from the EU after Brexit is uncertain. They can then choose to place an order or not.”

Trading with Northern Ireland

It is commonplace for mainland UK cycling distributors to ship goods to shops in Northern Ireland in a relatively friction free process as it stands. However, that stands to become more complex and time is light to address logistical challenges, says Eland.

“No Deal and a FTA will inevitably add considerable ‘friction’ and cost to UK-EU trade, deal or no deal, and there are also implications under the Withdrawal Agreement for trade between Great Britain and Northern Ireland.”

Those implications, whatever form they take, will be reported to Bicycle Association members as the shape of the final outcome becomes clearer.