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news
Brexit.pngBrexit: what does it mean to you and your bike?
There are a lot of weighty political and constitutional matters on people’s minds right now, but one of the things we’re wondering about here at road.cc is what it’ll all mean to bike and cycling component prices.
Yes, you’re right, there are other important issues on the agenda at the moment, like exactly how and when the UK will leave. Who will be the next prime minister and when will they be elected? And will the vote trigger another Scottish independence referendum? Of course, these are massive questions… but we’re really interested in bikes too.
The most often quoted timescale for Britain’s leaving of the EU is two years, although no one can be certain. But the actual exit process is not the only issue at stake here. The pound has fallen to levels not seen for over 30 years in the wake of the exit vote, and share prices have also been hit by the uncertainty surrounding the economy.
Shares in Halfords, Britain’s biggest bike retailer, for example, were priced at over £4 at the close of trading on Thursday, 23 June. They reopened at £3.20 on Friday morning, following the Brexit result announcement, and they’ve not been above £3.50 since. London's FTSE 250 index (it tracks 250 mid-sized companies) lost 7.2% over the day.
These could be just short term results of the exit vote, who knows? Will there be much of an upshot for the bike consumer?
“[The Brexit vote] won’t have an immediate effect on the price of goods as the 2016 stocks are already bought and paid for,” said Clive Gosling, marketing manager at CSG, which looks after Cannondale, Charge and Sugoi, among other brands.
“We are, however, just about to price the 2017 bikes that we will launch to dealers early August. We will have to speculate what the cost of these will be, based on the devalued GB pound against the US dollar, as most bicycles, parts, accessories and clothing are bought in US dollars.
“We will have to consider where the currency looks like settling rather than looking at the knee-jerk Brexit level – which, of course, is speculation on our part.
“Short term, I think 2017 bikes will be marginally higher priced. Longer term, bikes can be sourced out of markets where there are current EU dumping levies so it could mean lower factory prices to offset the currency if it doesn’t recover, hence no net increases over current prices. It might even make prices lower down the line.
“It’s all a step into the unknown but we don’t think you will see the dramatic price increases that people are speculating.”
When road.cc visited 3T a couple of weeks ago we were given a price for the new Exploro based on the UK remaining within the EU. We were told that the price would need to be reviewed if the UK left, although 3T would honour any orders made before the announcement.
We’ve contacted a whole host of other bib bike/component brands to ask about the implications of the Brexit vote, but they all say that it’s too early to comment.
“Officially, it's still no comment,” said one. “Our internal UK message is to keep on keeping on.”
In truth, it looks like any changes to duty are a way off yet, and if pro-leave politicians like Boris Johnson are to be believed, the UK can spend the next couple of years negotiating trade deals to minimise the impact on prices.
What about EU Standards? We’re used to seeing them on stickers and packaging for all kinds of products, including bike helmets and lights, for instance. All bike helmets sold in the UK currently have to conform to EN1078 European standard.
This European Standard is overseen by the European Committee for Standardization which has 33 national members. As well as all of the current EU states, non-EU states Iceland, Norway, Switzerland, Macedonia and Turkey are members. Does that mean the UK will still be a member when it leaves the EU? We imagine so but we’re not entirely sure because no sovereign state has ever left the EU before.
We'll be returning to this issue in the coming days.
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87 comments
The referendum demographics data, especially level of education and income, explain why some voters have problems with numbers
I see the most annoyed are also those who, if the voting analysists are to be believed, didn't bother voting.
You can't complain democracy has failed the people who didn't actually take part in it.
As for bikes....I'm a peasant, won't make much difference to me since I'm not really in the market for anything but chains and tyres for a while.
In 2015 the UK government paid £13 billion to the EU budget, and EU spending on the UK was £4.5 billion. So the UK’s ‘net contribution’ was estimated at about £8.5 billion.
Which equates at 163 million a week which is now surplus. A tidy amount by anyones standards.
A large number of business "experts" said not joining the single currency was a disaster and companies would leave the uk in droves, guess what they were wrong and the same people are saying similar things now.
I, for one, am very pleased we voted to leave.
IF YOU'RE GOING TO GO FULLY DAILY MAIL, TO THE EXTENT OF PUTTING QUOTE MARKS AROUND THE WORD EXPERTS, YOU REALLY NEED TO SWITCH TO ALL CAPS, AS JUST USING BOLD ISN'T ENOUGH TO CONVINCE EVERYBODY YOU ARE RIGHT.
(And I don't recall there being anything like the consensus among independent financial authorities regarding the benefits of joining the Euro as there has been on the effect of Brexit ranging from bad to calamitous.)
To put that £160ishM a week ( Ive seen other estimates at 120, but we'll go with 160), weekly spends are:
Defence 821M
Education 1.4Bn
Nhs 2.4Bn
Pensions 3.6Bn
The 160 is about 15% of the nhs spend - not chickenfeed, but it remains to be seen what the rest of the effect of brexit is on tax revenues, so that 160 may not exist anyway.
To use some **very**rough/ready figures as a ballpark figure: London finance sector employs about 360,000 (I was surprised); speculation is that 40,000 -100,000 jobs might move elsewhere - and obv. it may be a lot less but let's go with that as a first instance. Let's say ave 100k salary (prob many less than this but some a whole lot more), 40% income tax is 77M per week. And that doesn't include nat. Ins or tax income from spent salary. Obv. a 40,000 job loss would be a lot less, my salary estimate is *very* approximate - but investment banks will be a lot higher and then there's significant bonuses.
Indeed, ERM business didn't cause the upheaval that was expected, but equally we're in uncharted territory - and in a globalised world (my last employer had significant numbers of employees in numerous geolocations) , pulling employees out to Dublin or elsewhere in the eu may not be a big deal.
Getting back to cycling relevance: Many bike shops as well as component manufacturers are small or medium-sized businesses and benefit from EU free trade.
We don't know the future arrangements yet, but if the UK-EU relation reverts to WTO standard that might well mean that small shops find it too much paperwork to import components directly from EU manufacturers.
There will likely be import companies and distributors who handle the paperwork (as happens now for imports from non-EU countries), but it will add to costs, small companies might decide it's not worth it, and some less common components might become much more difficult to source.
No problem, our Chinese friends with whom we are relying on our post-Brexit economy will be happy to import lots of high-quality components that are the equal of anything genuine. Who needs things like 'EU standards', eh?
This Is a cycling website. If you want to go over and over the rights and wrongs of the referendum result, do it elsewhere.
If you don't want to read an article about Brexit or comments on said article then don't click on it.
Seriously road.cc, why did you think this was a good ides for an article?
To keep it contained? Or like a good helmet debate to generate a few click when nothing can actually be resolved?
Meanwhile, makes me wonder, in the Scottish Referendum, SNP had a Leave Manifesto. It was like a general election, there were actual policy points to debate and argue about, like currency, debt share, oil revenues etc. This time Leave had no actual plans (perhaps that was why they won) in reality all this 'waking up to the reality' backchat is because we were given no realistic idea of what comes next.
Cameron not being compelled to enact Article 50 was a stab in the back to his successor, they can take the blame for what will happen.
16h4in.jpg
So, the leave campaign lied about many things, primary £350m a week (which we dont send to the EU) being used on the NHS, meanwhile sonmeonehow covering the costs of all the things the EU pay for here. But also about Turkey joining imminently, and the entire prospect of keeping trade as normal while preventing free movement.
But Cameron should be the one toi enact artical 50? and not one of the leave campaign when they become PM.
Question - IF leave is such a good idea, why is it a stab in the back for Cameron to allow his succesor to take the credit?
I didn't say it was a good idea, its a bad one. It is a stab in the back because it is a bad idea and Johnson will get the blame, he can take the credit if I'm wrong. Its almost like you didn't read my post.
Why shouldn't he get the blame as a leading member of the leave campaign? My point was, as Boris (or whichever leave politician steps up) was campaigning for Brexit, THEY wouldon't see it as a stab in the back. Whereas starting the 2 year clock now, before the negotiators were ready and the country has no leadership would not be in anyone's interest.
Anyone any thoughts about cycling...?
Reaction: Knee jerk.... FCS it's not even been a week!!!!! Traders trade, the rich want to get rich etc etc. Everyone just needs to calm down, rumour and speculation are pointless, it just adds fuel to the fire,and, the media are the masters of it. At least we will be able to buy odd shaped fruit and veg.
There is a much bigger world out there, and let's face facts, no matter how many times Brussels say it was a bad marriage, they are far more worried about losing us than we are about leaving.
This country will be fine, and if the Scots want to leave let them, it's their choice. It's not like we have been together that long in the great scheme of things.
And, the biggest warning sign for me about Brussels was the formation of an EU independent military, not a Fcuking chance. The whole thing will disintegrate anyway, as you can't take the tribe out of tribal and that is what every country is whether you like it or not.
image.jpeg
For all those saying we should stop concentrating on the negatives of Brexit and start emphasising the postitives, here are all the positives in one handy list:
1. Cameron goes.
You have left a very large space full of nothing.
I'm curious what "restoring sovereignty" is and how it will benefit anyone other than the ruling class and corporate bodies?
IMO no country which trades internationally and on the international money markets can now be truly sovereign.
I don't know about Farage, but I think Boris quite likes the idea of turning us into a proper offshore tax haven.
Nothing in it for "normal " people, of course, but what do you expect when we've spent the last thirty years dismantling our manufacturing and production industries...?
If I'd been Cameron I would have gone in front of the cameras on Friday morning and announced that I'd invoked article 50 to the EU, that I resigned with immediate effect, that the keys to number 10 are under the flowerpot, I was taking the family on an extended holiday in Panama, and could Boris and Michael please take care of things now they've got what they (said) they wanted.
Is it Boris Johnson or Michael Gove, you would prefer as PM?
I'm not going to go into politics as I'm already extremely angry, to the point I'm seriously considering leaving the UK.
Anyway, I have a bike on order from Rose. I'm concerned that they will not honour the price and ship it considering the exchange rate dive
Yeah you and the other 16m other people who don't like the result. It's going to be a very empty place when you've all decamped to the continent.
It's not an issue if we build some amazing British brands. But we won't. We'll only invest in the finance sector.
Where's our Apple, Tesla, Google etc?
We've got a handful of old engineering firms and that's about it. Even out patents for graphene are virtually all overseas. Comedy.
We can't even get a desireable bike brand out, just some niche markets. Hoy and Boardman were well placed to create something special, but ended up going for lower and middle markets, which are already catered nicely to here. If Cipollini can retire and put out special bikes, then so could those guys.
Why's everything here so... half-hearted.
That's why Britain isn't going to do any better outside of the EU, because we don't make enough amazing stuff to import any more. We have the talent, we just don't have the investment.
I saw a rather tasty looking range of Pace bikes in a bike shop today.
Cipollini got his bikes under pro European teams, both male and female. Most bikes these days are functionality roughly equivalent and up to the job, it's the marketing that makes the brand.
If Boardman bikes could be ridden by Sky or even Pro One team and say Wiggle-Honda, then it would start to build European awareness. It's not Chris Boardman's call, it's up to Halfords marketing decisions though. Done correctly, Boardman could be a desirable brand for the European market, just as Cipollini brand is now.
Rich, Yes we are net contributors, but not £350m a week. It might well be a campaign tactic, but it is untrue none the less. There may well be savings "All being equal", or course, things aren't equal and never can be. There will be a cost in terms of inward investment and trade, what that will be is impossible to predict, but I doubt it will lead to the boosts in investment promised ("We could build a hospital every week.") The most probable result is that it has little impact on government spending.
Feel free to remember their promises in three years time and review the 2019 budget for extra spending. #BrexitBoost or #BrexitLies
Hasn't Farage already said "Yeah, about that £350m ... Sorry but we lied and should not have said it" or words to that effect?
I intend to. Need to keep them in check!
Personally I voted leave in order to restore sovereignty so didn't scrutinise the £350m claim too closely as it was irrelevant to my voting intention.
I accept the figure (minus rebate) is lower but it will still be a substantial sum of money (all things being equal) and we will hopefully be able to decide how to spend it ourselves.
Noting the amount wiped off the value of UK.PLC (FTSE100, currency reserves, savings, pensions etc etc - all boring stuff, sorry) on Friday was higher than the sum total paid to the EU over the last ***40 YEARS*** (£380Bn).
And that's before the predicted 25% slump in house prices (no bad thing for those trying to buy house)
Not 100% sure where you think this 'substantial sum' is coming from.
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