This double-whammy means prices for UK bikes and parts are only going one way – up.
Will bikes cost more after Brexit? We put that question to a dozen brands at the start of January and the resounding answer was neither yes nor no. It was: we don’t know, check back again in a few month’s time. So two months on, we’ve asked again: have costs gone up, by how much, and why?
The first question is easy to answer; yes they have. Direct sales is the easiest place to start because there’s no hiding from the final price in your online basket.
Take YT Industries, a brand known for its outstanding value. It tells customers on its landing page that bikes will incur increased shipping and import fees to the tune of £185, and a further 14% customs duty (or 6% for an e-bike) now we’ve officially left the EU. Bikes can freely move tariff-free inside the EU, but cross the border and that 14% fee is slapped on top of the price – the rule’s always been there, the difference is now we’re outside the EU.
We put that to the test, headed to the YT website and specced up a XT YT Izzo Pro Race at £4,599. To that you have to add a bike box, shipping costs, duties, advanced commission (the freight company’s charge) and handling costs, taking the bike to £5,400.76, or a sizeable £800 more.
“We could have increased the price of the bike itself and said, everything is included – the shipping the duties, the handling, and so on,” says James Lawrence from YT. “But I think the customer deserves to know exactly what they’re paying for, so it’s clear on the homepage.”
Canyon, also known for its great value, has taken the opposite approach and wrapped everything into the price of the bike, which has increased if you’re buying in the UK. By how much? We popped a new Canyon Spectral 29 CF 9 into the trolley on the UK site, added £18.99 for a box and £37.99 shipping taking it all to £5,505.98. Do the same thing on Canyon’s German site though – the same Spectral 29 CF 9 – and the bike, box and shipping comes to €5,048.80 (£4463.21) or over £1,000 cheaper, after converting the euros to pounds.
This is not profiteering with Brexit as an excuse, as some have suggested, this is simple economics – if YT and Canyon were to absorb those costs they’d be selling at a loss.
Canyon says it will continue to ship to the UK with one final inclusive price, but it will be constantly reviewed based on the regulations and trade guidelines provided by the UK Government. “We’ve addressed many new trading expectations head on, absorbed many costs ourselves and today Canyon still represents best value to the UK consumer,” the brand told us.
Meanwhile, Rose bikes has stopped shipping bikes to the UK altogether in light of the Brexit rules, while if you try to buy a Radon now through its online shop at bike-discount.de you’re told the bike can’t be delivered to the UK. Propain is still shipping to the UK, and their prices have actually decreased on the website, but only because VAT has been removed. This means the final bill will be presented to you by the courier delivering your bike.
But what of the much vaunted EU trade deal, proudly secured by Boris Johnson at the eleventh hour that promised tariff-free trade with the EU? The devil is in the detail, bikes can only pass tariff-free between the EU and UK if less than 45% of their value comes from imported parts from the rest of the world. Any more than that and you’re liable for the 14% fee. With frames, suspension, components and drivetrains predominantly originating in the Far East or Japan, clearly brands are going to struggle to dip below the threshold.
This cuts right into Propain’s business model because all the bikes it builds are unique. Buy one and you can customise pretty much everything about it, from the grips and paint colour to the fork, brakes and drivetrain and even the spring rate on a coil shock… that’s one of the cool things about the brand.
That also makes it very hard to work out whether those third party components push it over the 45% threshold, making the customer liable for that 14% tariff.
“It took us a long time to find out that criteria because there was so much misinformation around Brexit,” says Volker Knaus from Propain. “The next plan is to set up a UK entity with a VAT number so in the future a UK customer can pay directly to Propain.”
Trying to figure out price increases for online brands is one thing, but it’s quite another working it out for bikes bought through bricks and mortar stores. If their supply chains don’t go into Europe and bikes are built and distributed from countries outside the EU (including the UK), then their prices will be untouched by the punitive tariff changes.
Specialized told us the Brexit deal doesn’t affect its main supply chain from Asia, because bikes come directly to the UK from the Far East. “The area where we may be affected is the sharing of inventory with markets within the EU. Inventory is sometimes moved between markets to where the demand is, but this is not the primary method for supply,” Specialized said in a statement.
The predicament Brooks found itself in highlights the problem well. The brand makes high end leather saddles at its Smethwick factory in the UK. Buy one through the brand’s website though, and that saddle leaves the UK for Italy and global distribution, before returning here to the UK consumer, adding duty. However, anyone buying through a bike shop would find their saddle had never left these shores, instead distributed by Extra UK.
We asked SRAM whether its products would be more expensive to UK customers. No, it says, there are no increasing prices as a result of Brexit. However… “we are aware of current market conditions that are affecting the transport costs to the UK, of which we have no control over. Both SRAM and our distributors will do all we can to maintain prices.” No promises then; price rises could happen as transport costs go up. More on this in a minute.
Meanwhile another global bike brand also told us off the record that its bike prices would go up by around 10 per cent, with Brexit one of the causes.
Brexit has added a layer of bureaucracy to the process too, something many brands are wrestling with. “Say we’ve got a pallet of helmets we want to bring in,” says Colin Williams from FLi Distribution. “Some are made in Austria, some Germany, and so on. Each line could have a separate tariff code, and couriers say they’ll charge €70 per tariff code… there could be as many as 100 tariff codes.”
Clearly red tape from Brexit is having an effect, but it’s not all about the EU. “Shipping costs have increased five to six times over where they were a year ago, and the time it’s taking to ship has also drastically increased,” says Kelvin Lawton from Orange Bikes. “Containers are also becoming difficult to get hold of, which is also causing delays.”
A 40ft shipping container now costs $9,700 to ship from the Far East, up from $2,400 this time last year, according to Colin Williams. Brexit has certainly caused freight companies to increase their prices because they too have overheads and increased costs. But there are other factors at play too, not least the global pandemic, increased raw material costs – steel has risen around 25 per cent in 12 months – and vastly longer lead times on parts from brands like Shimano.
So have bikes and components increased in cost? It’s a resounding yes if you’re buying from inside the EU, where most bikes will be subject to big tariffs and increased shipping costs. If you’re buying a bike from the big brands with global supply chains, then it’s less easy to say, but the answer is probably still yes thanks to more expensive shipping, rather than Brexit.