We’ve got a big decision to make in less than three weeks, and with the debate hotting up, I thought it would be interesting to try and look at the pros and cons of Brexit from the points of view of small businesses and beauty businesses in particular.
It’s hard to stay completely impartial; we all have our own opinion and the decision about remaining or leaving the EU is such a huge one that I honestly believe we all need to make that decision based on what we know (limited) and what we believe.
Beauty Expert Opinion
I tried to do some digging into what key beauty industry experts have said about the subject and it’s been very quiet. Professional Beauty don’t appear to have any opinion on the subject whatsoever, in the most recent magazine or online. I suppose you can’t really blame them for wanting to be impartial but it would have been interesting to see a range of insider views on the subject!
It seems that the unknown quantity of life outside the EU is worrying many businesses, and the UK cosmetics industry association was raising concerns about the impact of leaving as far back as late 2015 before any referendum date was announced.
Dr Chris Flower, Director-General of the UK’s CTPA (Cosmetic, Toiletry & Perfumery Association) told Cosmetics Business last year that he thought the British cosmetics industry would face “a number of significant difficulties” if Britain left the EU. He said, “It is important to keep in mind that the largest export market for the UK cosmetics industry is the EU. Not being able to benefit from the EU single market could therefore have a significant impact on the UK cosmetics industry.”
Post Brexit and the Beauty Industry
According to Euromonitor International, the future post-Brexit could be challenging for the beauty and personal care sector. The full report “Brexit and the implications for the Consumer Goods sector” was published on LinkedIn via SlideShare:
The main take outs, as far as beauty and health are concerned are the forecasts that if we wave goodbye to Europe, the impact on beauty businesses is predicted to be ‘muted’ – whatever that means. Although I suspect that the more indulgent spa/salon beauty treatments and products might take a hit, as people start to tighten their belts again, the prediction is that by 2020 the UK market for beauty and personal care could well be US$205 million smaller in value terms (and at 2015 prices) if we leave the EU.
Euromonitor International think that the sun care and men’s grooming markets are the most likely to feel the effects, but if you’re selling shower and bath products it’s unlikely you’ll see much difference.
Brexit and Small Businesses
What about small business as a whole? It depends who you talk to.
Sport and Recreation Alliance chief executive Emma Boggis said that she believed the potential tariffs on imports from the EU would have a knock-on effect on sports and leisure equipment – increasing costs for gyms and spas.
If you’re a business that employs EU workers, whether on long term or seasonal contracts, a vote out of the EU is likely to affect your staffing arrangements, in the long term if not straight away. Some of your best therapists might have to go ‘home’.
Michael Hatchwell, senior corporate lawyer at law and consulting business Gordon Dadds, told smallbusiness.co.uk that although we can’t know for sure if we’d be better off if we leave the EU, we DO know that several large companies have threatened to pull out of the UK if we do cut ties. If that happens, there will be fewer companies setting up in the UK to access the EU, and this is bound to have an effect on smaller businesses.
Do you buy in beauty ranges from EU countries? Your Caudalie or Germaine de Cappuccini invoices might be affected by Brexit, depending on whatever trade deals the government manages to haggle with a disgruntled Europe post-Brexit.
If the pound does take a nosedive, you can expect your costs to increase; analysts say that a weaker pound would potentially impact all retailers, and it would be up to you as a business whether you wanted to swallow that increase or pass it on to your clients, risking them deciding that they can’t afford to buy your retail products or even pay for their salon treatments.
I really did try to find some positive news for businesses about Brexit, and of course we don’t have a crystal ball to see what’s going to happen on 23rd June or afterwards.
This is what I did manage to dig up.
PROS OF BREXIT
- Some EU trade regulations are thought of as being unnecessary red tape – mainly affecting the food industry. Without them, the government can make its own decisions – some small businesses think that EU regulations affect them disproportionately so would be quite happy to scrap them.
- Overall, the cost of contributing to being a member of the EU is €180 per person in the UK, so there’s a possibility that tax reductions could be made which benefit everyone.
- We might be able to negotiate membership of the European Economic Area but while pulling out of the EU, which is what Iceland have done. This would give us the main benefits we enjoy from being part of the EU now, but without the red tape that goes with it.
It’s not easy to stay impartial about such a big decision is it? I’d love to know what you think.