BCF blog - Coatings industry tied up in red tape and delays in trading with NI and the EU

By Tom Bowtell, CEO

11th February 2021

It’s been a very disruptive start to 2021 for BCF members.  We commented on the UK/EU trade deal (welcomed at the final hour to avoid tariffs, as a thin deal that was the hardest form of Brexit, with significant “friction”) which has turned out even worse than we expected in the first few weeks of the new year.

Since Christmas Eve, we’ve had meetings with Cabinet ministers, Ministers of State, senior government officials and lobby groups to discuss the impact of the trade deal on the chemical industry and its supply chain, and our experience to date.

We’ve just completed our Brexit impact survey, with almost 30% of BCF’s membership responding.

The key takeaways from the survey are:

• BCF members are experienced exporters (75% already trade with the EU and beyond to the rest of the world, so are used to dealing with customs paperwork and procedures)
• 85% of BCF members spend significant time and money preparing for Brexit
• Despite the above, 80% of those who prepared well are experiencing problems, of which 50% are having major problems, and 30% report minor problems.
• Brexit will increase operating costs for UK companies – 30% of companies expect 3-10% increases in operating costs, 23% expect 1-3% increases.  Costs relate to shipping costs, increased costs of imported raw materials, admin costs to complete new paperwork.
• Brexit brings significant red tape and delays to imported raw materials, and exported/imported finished goods, and will change the way we trade with the EU.

Unfortunately, this is just the beginning. Whilst some issues are teething problems, and industry understanding the new operating relationship, other problems are simply negative impacts of leaving the EU’s customs union and single market that cannot be resolved.

And to add to the gloomy picture, we have the prospect of UK REACH, which will dramatically reduce the competitiveness of UK manufactured paints, coatings and printing inks.  The UK Government is creating an exact duplicate of EU REACH in the market 10 times smaller, with an estimated £1 billion cost to the UK chemicals supply chain.  This simply isn’t acceptable to industry, and we will be using all our energy to fight this in the coming months, to find a solution that allows industry to prosper, whilst ensuring safe use of our members products both for the environment and users of coatings.

Whilst there are still many challenges to face, our members have proven their resilience and ability to overcome major issues put in front of them. We will continue to support our members and work with them to make 2021 as successful as possible.