No balm for business

The finished product. Image copyright Lionsleaf

Until 1 January the full impact of Brexit on the UK its people and businesses was an unknown quantity. You could say it was a promise, a hope… even a mirage. Brexit could be anything you wanted because the details were not known. Indeed, even the broad outlines remained unclear as the government continued to toy with the idea of a no deal Brexit. Now, the reality is here and overnight the changes have taken place. I have been trying to find what effect this last-minute change has had on the ordinary businesses in Somerset, talking to people to find out the difficulties and opportunities they are experiencing.

In a previous article, ‘Brexit reality bites in Somerset’, I explored the impact leaving the EU had on BJW logistics. Barry, the owner of the company, spoke of the barriers for his continued trade across Europe. This time I have spoken to Vicky, one of the owners of Lyonsleaf who specialise in skincare and natural beauty products and are based in the Mendip Hills in Somerset.

“We are a small, but successful family business; we grow herbs on our Somerset farm and use them to create our award-winning range of hand-made, natural skincare.”

Vicky was keen to explain how important ethical responsibility is to her company:

“We are committed to providing 100% natural, safe, effective, cruelty free skincare, suitable for the whole family and all skin types (even very sensitive skin), at a price affordable to ordinary people, with the smallest environmental impact possible.”

I asked Vicky how leaving the EU with the new trade deal has affected her business:

“We already export a lot to Hong Kong and we have a good customer base in the USA, Canada and Australia. We were poised to implement plans to expand our business in the European market, which we have hardly tapped. Lockdown and home-schooling have been the only things to hold us up.  We knew that Brexit would bring changes. We understood that the government intended to duplicate the EU cosmetic regulations here and that we might need to have our product recipes re-certified. For us, this would not be prohibitively expensive as we have a small product range and we were expecting to do a large amount of trade, so we were prepared for this.”

Vicky had expected that, with a little planning and a little extra cost, the impact on Lyonsleaf of the UK leaving the EU could easily be mitigated.

“Unfortunately, our certificates are not the only barrier. We have since discovered that we require a ‘responsible person’ who lives in the EU.”

A ‘responsible person’ (in this case) is usually the manufacturer or importer of finished cosmetic products based in EU (if you are covered by EU regulations). Before Brexit, these regulations covered you to trade globally. So you might think the new UK regulations would also cover global trade; however, this is not the case. UK manufacturers of cosmetics now have to appoint a legal person or an EU national based in the EU to undertake regulatory obligations such as carrying out product safety assessment, submitting product notifications, keeping a product information file (PIF) and reporting serious undesirable effects if they want to sell in the EU.

A trolley full of calendula harvested on the Mendip hills. Copyright Lyonsleaf.

“How is a small business like Lyonsleaf supposed to find an EU national to act for us as a responsible person? It’s just not feasible.”

So I asked Vicky whether this would prevent her firm from selling in the EU:

“At the moment, yes we will have to put selling to the EU on the back burner. We will now have to change the shipping destinations on our website, so our existing EU customers cannot order (which will cause much disappointment from those who rely on our products). It is absolutely galling for us. We were about to erect a new building at our farm to house the business, but without being able to expand into Europe we may have to scale the building back or even put it on hold altogether. This will put our company under immense pressure. We desperately need the space, but we can’t be sure we will be able to generate the extra funds required.”

With all that you have told me, what is the likely impact on your business? I asked

“The thing is with Covid-19 pandemic, having to deal with the uncertainty and issues around Brexit is an unnecessary pressure.”

“The final nail in the coffin of us doing any European trade will be the ‘Rules of Origin’ which may affect our products due to some of our ingredients. This could mean trade tariffs, rendering (for us) the trade deal worthless. Once again this is unexpected and not something we could have prepared for. To top it all, it is the attitude of our Government. How dare they say we should have been ready for Brexit and if not, then it’s our own fault? I have been actively trying to be prepared and yet there was no advice for my specific issues, the government websites are woefully inadequate and inept. What they fail to understand is that by leaving it to the last second before agreeing a deal [with the EU], it has meant that businesses have had no time to prepare properly. It has been a challenging year for everyone in business, but we will overcome.”

It is a testament to Vicky’s resilience that, despite all the problems and lost opportunities, she is so determined that her business will survive. Having originally been relieved when the government reached a deal with the EU at the last minute, she is finding that it has become prohibitively difficult to trade with her closest market. 

If, like Vicky, your business has been affected by the changes with our relationship with the EU either positively or negatively, West Country Bylines would like to hear your story.