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news
EU flag 2Brexit cost bicycle business £250,000 in two months
A Welsh business co-owner says Brexit cost him £250,000 extra in the first two months of this year.
Children's bike manufacturer, Frog Bikes, employs around 50 people at it's factory in Pontypool and has a global customer base, Wales Online report.
However, the affect of Brexit and the UK's trade agreement means that the company has spent much of this year adapting to a challenging new way of doing business.
Co-founder of Frog Bikes, Jerry Lawson, said: "I couldn't say there was anything positive.
"There's extra paperwork, and there's extra costs. And there's a whole lot of unknown."
Mr Lawson co-founded Frog Bikes back in 2013 with his wife Shelley.
The pair were searching for bikes for their children and, after not finding anything suitable, they decided they would go into business creating their own range of affordable bikes for kids.
After three years of growth, in 2016, the company opened its Pontypool factory with support from the Welsh Government.
"The business is growing. The UK [market] last year grew 18%, said Mr Lawson.
Since the company was set up eight years ago Frog Bikes has been selling more and more bikes to EU countries such as Germany, France and the Netherlands.
> Brompton reels from impact of Brexit and Covid
However, in spite of all of its success and continued growth, 2021 has been a difficult year for the company for one reason - Brexit.
Mr Lawson said: "We're getting stuck in customs both on this side and in European countries.
"The paperwork is also incredible. To begin with, some of the countries wanted the paperwork in their language.
"Now we send them a commercial invoice with a whole lot of customs information. Plus, it's four or five times we have to print it."
Until Brexit, standard customs had not been done that way, and the company did not need customs declaration forms for stores in the EU.
The customs declaration includes information about the country of origin, shipping codes, and information about VAT, among other things.
> New bike day turns into £2,000 Brexit nightmare for British cyclist
Additionally, the European stores Frog Bikes sends its products to may also have to pay VAT, courier fees and consignment fees to receive them under the new trade deal between the UK and the EU.
Mr Lawson explained: "Spanish stores are being charged 60 euros per consignment.
"They might be charged a commission or finance fee by the courier. So, they can get the import VAT back but they can't get the consignment fee, and they can't get the commission fee or finance fee that is charged.
"So, if we only send three bikes to them, that works out at about a 50 euros increase to the consumer per bike. And that then means it's a real barrier.
"We are gripping onto them by the skin of our teeth at the moment because a lot of them are very frustrated and concerned.
"I don't know how long we'll hold onto them if we can't find a way around the delays, the paperwork and the extra costs.
"A store we've known for seven years who we've been trading with... came back and contacted me because they're really struggling. They don't know what the costs are every time."
On top of this, to try and minimise the costs for the consumer, Mr Lawson explained that the cut of profits stores in the EU took home from selling Frog Bikes had decreased.
"If we reduce the margin the stores get by 2% or 3%, that means the price increase to the consumers is lower," he said.
Prior to Brexit, the EU accounted for roughly 47% of the company's business. Now, however, Mr Lawson explained he could see that percentage decreasing.
"Unless we find a workable solution to the barriers, the non-trade barriers, we can see that diminishing because we will lose these stores.
"And we know that because we talk directly with the stores. And when we have lots of stores in these markets, and they're all feeling the pain, it has a risk for our business. And the challenge then is, if we lose those sales where will we make it up?"
In addition to uncertainty surrounding import fees for European stores, Frog Bikes, like other manufacturers, has seen growing component costs and a huge rise in shipping fees.
As a result, the company spent over £250,000 in Brexit-related costs by February of this year alone - just two months after Brexit came into effect.
"That's wiped out our profit for last year, completely," said Mr Lawson.
He explained that, in all of his years in business, 2021 was the most difficult period he had experienced.
"We've we've had various different things over the years.
"There was the dot-com burst, you had the banking crisis, but this is much worse. And if I look at how we were faring last year, based on the pandemic, this is much worse than that as well."
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85 comments
£250,000? That's about £25 for every person that voter for Brexit in Pontypool.
I'm sure that now they are feeling truly independent they're also feeling generous.
Love and hugs
No-one is addressing the elephant in the room: supermarkets don't seem to have any of those fresh anchovies in their delis anymore.
Edit: I just visited my local Deli and luckily they had some marinated anchovies left.
Are you telling me that there's a God and he voted leave? I hate anchovies....
I've always prefer'd inner tubes.
I don't think He often gets involved in politics as surely even the Tories are the lesser evil. But to be fair, Cthulhu never created delicious anchovies so maybe you meant some other god?
Wait - deli counters are still a thing?
He must live in Hampstead....
Well, maybe in the larger shops. Luckily we have loads of delis near us - we used to have 3 Polish delis within a 50m range.
Surely one of the biggest benefits of Brexit has been the free money that's surely been pumped into the NHS and has enabled the biggest pay-rise for NHS front-line staff in the last few months?
Whilst I know it is very divisive, can I implore people to not use "remoaner" or "Brexshit" or other playground terms. Some posters on both sides have valid points about it but all those terms do is trivialise and just mean post threads devolve into childish ranting. It is embarrassing for all in the long run.
But then Eton Rifle would never have been able to use the phrase "Quitlings" which I had not heard before and I rather liked.
FFS the Referendum was nearly five years ago, grow up, get over it.
Erm, I was asking people not to be insulting and using childish terms for both sides and I need to grow up?
Brexit was a scam that sadly many gullible people fell for, and now the rest of us have to put up with the dire consequences.
Boris Johnson, Nigel farage and the rest of the clowns are laughing their heads off at one of the biggest scams ever to have been perpetrated on a supposedly intelligent population.
Project fear becomes project reality as predicted.
Ahhhh, how sweet, still throwing toys out of the 'I was right' pram. We had the debate for years, we had a referendum, you lost, grow up, accept the fact. Or move to Brussels.
Isn't moving to mainland Europe a bit trickier than it used to be, though?
Anyone know what the other 8 posts were from Planet Janet? Anything about bikes at all?
So Road.CC that's the 17th BREXIT post this year - I think you've made your point that you are remoaner cry babies and rather stay in the EU. I ride a bike as a release and enjoyment and don't really want to read any sulky political articles - for or against. There's the mainstream news for that.
You still read it and felt the need to comment expressing your political viewpoint. Seems disingenuous to me.
The referendum was YEARS ago. You lost. Try to be a man and accept the fact.
Someone told me only the other day that you don't actually have to read every single article on Road.cc. You can chose! It was a revelation. I feel I have my life back....
By the way, congratulations on your first post. I do hope there will be more.
I didn't read it - just saw the headline
Oh no a brexiteer going off on one without looking at the detail or taking time to appraise the evidence.
First time for everything I suppose...
You lost the referendum five years ago, boo hoo, still whining.
Well done. Posting the same dumb thing over and over within seconds, reinforcing the stereotype of pro-Brexit voters as being both stupid and wilfilly ignorant. Your mum may regret letting you use her smartphone.
I guess you're not in a job where Brexit has made it more difficult or more complicated or aspects of your life more expensive. Or made you jobless (yet).
For readers who can construct a coherent sentence or two, this is by ex-Marillion frontman Fish on the difficulties faced by UK artists trying to tour in Europe:
https://www.carryontouring.uk/blogs/carry-on-touring-real-people-real-li...
Music is a huge industry and touring is a big earner for UK bands and artists, especially nowadays. And of course for those who work with them - roadies, engineers, lighting crew etc. Even a solo artist like Fish has 9 other people with him on tour!
A Brexiter who doesn't read further than a headline. What a novelty.....
If you had read it, you'd no doubt have realised that the article was reporting the issues the business was experiencing as a direct result of the end of the transition period and the new trading relationship between the EU and UK. It's a factual report, with no editorialising on our part.
They are posting stories about cycling. If this is the 17th this year then I expect 17 different stories have emerged from cycling sources. Why don't you find links where Brexit has helped cycling business and link them here so they can use those.
Why doesn't the original poster find links where Brexit has helped cycling business and link them here so they can use those? I'm going to stick my neck out and suggest that's because there aren't any. Which just goes to show that there's nothing quite as pitiful as a sore winner.
Strangely, stories of UK brands expanding are never accompanied by any mention of Brexit.
Sigma and Ribble have both announced expansion plans this year.
Both businesses will have seen their EU competitors placed at a distinct disadvantage post brexit.
For some unfathomable reason road.cc never even mentioned brexit when reporting the news of their expansion.
Yet when Brompton complained of the difficulties they were currently facing, of which brexit was mentioned as an aside, guess what road.cc chose as their headline?
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