At 11pm this evening – Friday 31 January 2020 – the United Kingdom will officially be leaving the European Union. After three and a half years of upheaval and uncertainty, prime minister Boris Johnson has promised that today will hail ‘the dawn of a new era’ for Britain.
Is it important to note that – for both businesses and citizens – little will change immediately, as the UK enters what is being termed as a ‘transition period’. Most EU laws will continue to apply until 31 December, by which time the UK aims to have reached a permanent free trade agreement.
Of course, this will have significant ramifications for many areas of international trade and the wider global economy – although it is not yet clear what they will be. Partyworldwide.net spoke to Smiffys’ chairman Ray Peckett at Spielwarenmesse to find out what ‘Brexit Day’ means for the global costume and party business.
“Well we’re having a huge party to celebrate our exit from the biggest trading block in the world,” he began, tongue firmly in cheek. “But really, it’s a sad situation. We’ve had to start bringing goods into Europe through Rotterdam. We used to bring them in through Felixstowe and we would distribute from Gainsborough (Smiffys HQ) to all over the world. Now those goods destined for Europe come into Rotterdam – I guess that’s something like £20million worth of product – and we used to pay the British government VAT on that. Now the Dutch government are getting that. So it’s a bit of a silly situation.”
Smiffys has had a warehouse in Europe for quite some time now and recently made the move to even bigger premises. Is that the final decision for the company?
“It has to be,” said Ray. “The goods will never come through Felixstowe or England again – they will always continue to be distributed via Europe. It makes total business sense to bring goods into your local distribution centre, which for us is now in a place called Noise in Germany. So for us I’m afraid the door is closed now on UK distribution. And it’s made us think how we should actually do things in the most efficient way.”
Smiffys now has a warehouse in Indiana (which holds goods for the US market) and a global distribution centre in Ningbo, which sends product onto to four futher distribution centres around the world. “It’s very efficient,” Ray added, “and the net result of this is that we’re not ever going to change and go back. It was Brexit that prompted us to change our business model.”
Business both inside and outside of the UK will go on for Smiffys of course, thanks to the provisions made by the company over the last three and a half years since the referendum. “Business is fantastic in Europe now because of this. European customers see us as a European company now and British customers still regard us as British and so business is booming.”
On a personal note, Ray added: “What else can I say. I voted to stay in and I think that it’s a shame that my kids won’t be able to go and live and love throughout Europe. I just think it’s really a sad day.”
