Of all the things that have happened in the UK over the last few months, I’m still left wondering whether Prince Charles is put out that his mum is one of few that hasn’t decided to resign. (J/K).
Brexit, brexit, brexit. It’s probably the one thing almost all of you will have heard of, even if you’re not in the UK and I thought it would be fitting to have a think about its potential effect on the beauty industry and what we can expect.
The name of the game for the beauty industry, is uncertainty. We have no idea what will happen on the political front (or when, if the current situation is anything to go by). Until something is decided and things change, it’s business as usual. Which means that the obligations the UK is currently under in terms of safety, testing, sales etc. remain completely the same. The Cosmetic, Toiletry & Perfumery Association (CTPA) said, “In particular, it means that all of the cosmetics sold in the UK must continue to comply fully with the European Cosmetic Products Regulation, including requirements relating to safety, labelling and the ban on animal testing.”
However, uncertainty remains the real risk. The UK might become a member of the European Free Trade Association (EFTA), like Switzerland, or it might not. It may join the European Economic Area (EEA), like Iceland, Liechtenstein, and Norway – to maintain the free movement of goods, services, capital, and labour. Or it might not – particularly as the free movement of labour is likely to be the biggest sticking point domestically. Being part of the EEA or the EFTA obviously means complying with the obligations that each has created for its Member States. The EEA’s requirements are very similar to the current responsibilities the UK is under as a full member of the EU and losing the clout of being a full Member may not be the best decision.
Two of the greater areas where the beauty industry is likely to be affected are firstly, in the UK’s current role of being the main export market of North American brands looking to break the European market. At present, American brands look to the UK as their main export market in Europe – very few, if any will go directly to the mainland. That could all well change.
And secondly, pricing. If the UK slides into a full recession, it will impact the EU as a whole and depending on how far the £ drops, what you can get for your money, may well change drastically.
The longer term impact of uncertainty is that investment is likely to fall. Until the political situation stabilises, companies are less likely to want to invest money and resources into developing a strong presence in the UK if they don’t know what is likely to happen next or when. It also makes things difficult to plan i.e. whether brands should launch, when they should launch, whether current operations should be expanded or shut down and moved abroad. All of these questions in turn have an impact on employment, tax revenue, the labour market and labour economy.
Let me know your thoughts on Brexit’s impact on the beauty industry below. Are you from the UK or abroad? What do you think will happen next?
Published by Rabiya. Beauty blogger. Politically opinionated.