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Brompton reels from impact of Brexit and Covid

The foldable bicycle maker has warned of soaring costs for UK manufacturers

Brompton is facing a host of problems from material shortages to rising production costs as the fallout from Brexit and Covid continues to impact UK manufacturers. 

Managing director Will Butler-Adams believes that even the boom in cycling during the pandemic and a 6 per cent jump in the price of the foldable bicycles will not be enough to mitigate against the extra costs from aluminium shortages, more expensive steel, higher shipping rates and Brexit. 

Speaking to the Financial Times, he said: “If you roll all of this together — logistics costs, Brexit costs, not enough people making bike parts — then it means customers paying more."

He warned that the price of the London-made bicycles, which rose 6 per cent at the start of the year and cost between £850 and about £3,200, would probably increase further to about 10 per cent compared with 2020.

> Brompton Bicycle’s UK online sales soar fivefold during lockdown

Coming from an industry that has thrived during the pandemic Mr Butler-Adams' comments serve as a stark warning of the pressure-cooker effect of a host of global problems. 

Other small UK businesses, which have enjoyed increased demand for their products in the pandemic, from the country’s only espresso machine maker Fracino to insulation manufacturers, told a similar story of a cocktail of global supply issues and raw material costs hitting margins, with Brexit just an added problem rather than the main drag on profits.

Mr Butler-Adams, a key shareholder in Brompton, predicted that the jump in consumer demand for the company’s bicycles would persist beyond the lifting of coronavirus lockdowns after a surge in sales by about 20 per cent to about 70,000 units in the past 12 months.

He said that he believed customers would still be purchasing bicycles even after pubs and restaurants re-open and people begin spending money socialising indoors once again. 

He added: “The Roaring Twenties, here we go.”

> UK bike market has gone berserk during pandemic 

Scaling up production will still be a mammoth task however, with the shortage of materials and rising costs only made worse by the grounding of the Ever Given in the Suez Canal which Mr Butler-Adams thinks will affect production in around six to eight weeks time. 

The main cost increases are because of rising steel prices, which have shot up in the wake of the pandemic and a jump in shipping costs, exacerbated by Brexit in some cases.

In addition, the company faces shortages of aluminium, after a warning from its Taiwanese supplier and processors for electric versions of its products as a result of the chip crisis.

Mr Butler-Adams also said the company was working hard to deal with the latest problems caused by the Suez Canal disruption.

He continued: “We’re all over it like a rash. We know which parts have been delayed. We know whether we need to fly it over and how many we need to fly over. We’re finding ways to keep our continuity going.”

However, he gave a cautious warning and added: “I’m sure in the next 12 months, something will get us. We can’t keep wriggling out of it.”

Butler-Adams' current issues with Brexit is somewhat at odds with his more positive outlook in years gone by. In 2017, he told the Daily Mail that the Brexit debate was "massively overrated", creating a "momentum of fear" for business. He also previously said that the fall in the value of sterling following the June 2016 referendum had enabled Brompton to reduce prices in overseas markets; although by January 2019, Butler-Adams said that the company had stockpiled parts worth £1 million to minimise disruption to its supply train in the event of a ‘No Deal’ Brexit.

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The Giblet | 3 years ago

Will B-A is the same dickhead who said in 2017 about Brexit with no trade deal that it was fine, same as doing business with China! What a dick head, link to article where he explains his delusions....

Rich_cb replied to The Giblet | 3 years ago
1 like

How about instead of just throwing insults around you explain why he's wrong?

If Brompton can thrive in markets where it is subject to significant tariffs then why could it not thrive in the EU under similar circumstances?

Gus T replied to Rich_cb | 3 years ago

But he's saying that Brompton can't thrive because they can't get the materials they need. Yet another UK company that will end up abroad because Brexit turns out to be an economic disaster for the UK

Awavey replied to Gus T | 3 years ago
1 like

How is an aluminium shortage,worldwide impacting, caused by Brexit ? Did people buy and hoard too many cans of stuff in case of no deal and havent recycled them yet...

Rich_cb replied to Gus T | 3 years ago

Please elaborate.

How has leaving the EU affected Brompton's ability to source materials?

If the materials he needs are manufactured in the EU then no tariffs apply to them so nothing has changed since brexit.

If the materials he requires are sourced from outside the EU then the tariffs post brexit are likely lower than they were when we were in the EU so that's not as issue either.

jmcc500 | 3 years ago

Given that everything non-electric on their website is showing as sold out, I think they could increase their prices and still have a viable business. Must be a nightmare to manage though, and a shame for consumers who ultimately will have to foot the bill for the Brexit folly.

EddyBerckx | 3 years ago
1 like

Wonder when they'll switch all production to abroad for more £££. I just get the feeling it's the sort of thing they'll do at some point

steveal50 | 3 years ago

Imagine if Specialized or Trek were still producing the same bike as they did in 1976 or so...

Brompton remind me of the British motorcycle industry in the 70s, 80s etc.

[I speak as the proud owner of a raw M6L]

open_roads | 3 years ago

The American brands who produce in Taiwan have already raised U.K. prices (and elsewhere) by 10-15% so the playing field is still level.

Brompton have a great iconic product - when parts availability and freight costs normalise they should continue to do well. One way they could mitigate the current issues is to source more of the components in the U.K. - I'm sure the likes of hope and USE could help them out with hubs, cranks etc.

Gkam84 replied to open_roads | 3 years ago

Hope have upped their output to something like 30% more than previous and still can't keep up with demand, there is a massive backlog on orders and shipping dates are all over the place. So using someone like Hope isn't going to make it any easier.

Sriracha replied to Gkam84 | 3 years ago

So when can we expect a "brexit" story about Hope on

Gkam84 replied to Sriracha | 3 years ago

Why ask me? I've nothing to do with the site...

Gkam84 | 3 years ago

A man who has flip-flopped, telling everyone " 10 per cent for WTO rules is virtually irrelevant" and "Brexit momentum of fear is damaging the economy" and then that "Brexit is going to impact UK industry in ways never foreseen"

In Nov 2020 they were boasting about the stockpile they had managed to create that would see them through the worst-case scenario. They claimed around a £1.5m worth of goods stockpiled, but raised their prices by 5%, even with the goods already paid for, just profiteering on the boom there was in cycling caused by Covid. He can go cry elsewhere.

jaymack replied to Gkam84 | 3 years ago

It's called 'Capitalism'; I mean who'd have thought Butler-Adams was in business to make money? As someone once sang "the only notes that really count are the ones that come in wads...".

Rome73 replied to jaymack | 3 years ago

"People said we couldn't play, they called us loud mouthed yobs . . . . . . . ' It's a swindle, it's a swindle. 

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