Brexit. That little turn of phrase that sends shivers down my spine. Over here in the U.K., it’s pretty much a swear word. Until COVID-19 started hitting the headlines, literally every single day for a year or so we were bombarded with news and information on the latest progress of this rather major event in European history.
It seemed that our country was torn — some wanted us to leave, others wanted us to stay. We had arguments over it, lost friends over it, wanted to bury our heads in the sand and never speak of it again.
But here we are. The U.K. is now in the transition period of leaving and the process is set to be completed by the end of December. But why was this such a big deal? What makes leaving any different from remaining?
Let’s start from the beginning.
The U.K. is a small country, nowhere near the size of the U.S. Our population is smaller and our internal market is smaller. Because of this, the number of adult businesses (both wholesale and retail) within the entire United Kingdom is less than those of the U.S. This posed a problem for not just the adult industry, but also all industries in general. We needed to rely on imports and exports to help to make our economy bigger, to drive sales and grow our customer bases. This is one of the reasons why the European Union was created. It gave all member countries a common trading agreement, and we could not only freely import and export to any other E.U. country, but we could travel, work and live in any E.U. country without hassle and without needing to fit into set criteria to become eligible.
Although we were still the U.K., we became united with every other member of the E.U., easing the flow of goods and services and bringing a range of benefits to businesses.
There were downsides to being a part of the E.U. Becoming a member also meant that we had to abide by E.U. laws, which the U.K. has less control over. Although many of these laws (like human rights protection laws) were very beneficial to us, some other laws (like fishing regulations) were less favorable to some, which is why a number of people no longer wanted to be a part of this union. Others also disagreed with the costs involved to be in the E.U., claiming that the money would be better spent on things like healthcare and housing.
The Leave Campaign claimed that we could make new trade deals with other countries such as the U.S. and China once we had left. Worryingly, we are around five months away from the deadline and still without any confirmed trade deals to replace the E.U. ones.
Whichever way we voted, Leave narrowly beat Remain (although it has now been reported that the campaign has been interfered with by other countries outside of the E.U.!) — which brings us to where we are right now. The U.K. is in the transition period of leaving the European Union and we are still officially set to leave in December.
How did the E.U. help the adult retail chains?
The E.U. gave adult retailers a much larger customer base. It allowed customers to buy product from any E.U. country without having to pay import duties for their goods. This made it more favorable to buy from the U.K. than countries outside of the E.U. like China and the U.S., and gave retailers a boost in sales.
Many U.K. retailers source their goods from wholesalers and distributors based in other European countries that are within the E.U. Again, as the system was designed to create friction-less trade, no import duties were charged, and this kept costs down and allowed retailers to remain competitive against other European countries.
What happens now then?
Once we leave the E.U. completely, we have to hope that the U.K. government has confirmed trade deals with other countries like the U.S., which will allow us to source goods on a similar basis to what we have been used to. Retailers will still be able to import from and export to the E.U., however an increase in tariffs may mean that this becomes less favorable than dealing with countries which we should have new trade deals with.
There is a great deal of uncertainly within the adult industry thanks to Brexit. As a British citizen, I often get asked by other European retailers and wholesalers about what will happen once we leave. And my reply is always the same. I just don’t know. Sadly, not even the government knows because this has never been done before. Never has a country left the European Union.
It has discouraged a lot of trade deals between companies who want to wait until after we leave to get an idea of how things will work. But citizens of the U.K. and the rest of Europe are all in the same boat. We simply still don’t know at this stage what will happen.
Drops in retail sales had been forecast (especially from consumers in the E.U. who are buying from U.K. stores), however, this hasn’t been as sharp as expected. Saying this, online retail stores seem to be doing much better than our high street retailers. A big factor of this is the COVID-19 pandemic, which has caused months of lockdown for our highstreets and shops but created a huge boost in online retail sales across all industries. Lockdown aside, the change in retail sales may be due to the fact that we are still in the transition period and tariffs haven’t yet been introduced keeping sales steadier than expected, but only time will tell.
I spoke with Drew Bigglestone from Luke & Jack, an adult store based in Glasgow, about how the effects of Brexit could impact his business.
“Sometimes retail for small independent businesses can feel like a sprint where we quickly have to firefight challenges, learn new skills and adapt. But with Brexit, it has become a marathon,” he said. “There’s no established rulebook, and anyone and everyone seems to understand it differently. Brexit has become so convoluted and confusing. Whereas we were initially prepared, getting the latest necessary paperwork, asking questions and having meetings, it now feels much more like we are either sweeping it under the carpet again, or that we’ve done all this work for nothing.
“Luke and Jack is fortunate,” Bigglestone said. “We've got a vibrant, broad and varied team with skills to keep adapting and changing, and we feel we’re able to face what’s to come.”
The U.K. government hasn’t said much on the matter of Brexit recently, and many believe they are using the coronavirus pandemic to distract from what is really going on behind the scenes. Who knows what will happen in December? Will we have a second vote due to the outside interference of the campaigns? I doubt it. But we hope to have some new trade deals ready to keep the adult industry in the U.K. booming. And you never know, we may be working with you a lot more closely, America!
Daniel Miller has worked in the industry for over 10 years and specializes in adult retail and wholesale. As well as working in this sector, he is also a DJ and producer, keen photographer and is the proud owner of two chinchillas, a chocolate Labrador and his husband, Dave.
