The trade association for the British luxury sector has released a new report coinciding with the UK-EU Summit in London, spelling out the consequences that the UK’s departure from the European Union (EU) has had for premium exports. 

The latest edition of Walpole’s Trading with Europe report for 2025 featured research conducted by one of Europe’s biggest economic consultancies, Frontier Economics. 

According to the study, luxury exports to the EU were, on average, 43% lower than they may have been if Brexit had never occurred. 

This, the organisation stated, amounted to a “substantial ‘Brexit effect’” on an industry that supports more than 450,000 jobs and swells the exchequer by £14.6 billion. 

Fashion and accessories exporters have been particularly hard-hit 

The research – believed to be the first comprehensive analysis of the effect Brexit has had on the luxury sector – shows an especially pronounced impact on fashion and accessories (-64%), as well as interior design, home, and craftsmanship (-50%). 

By comparison, the trade association said, the UK’s premium exports to non-EU markets had almost returned to the levels seen prior to the COVID-19 pandemic. 

The proportion of EU exports as a share of overall luxury exports has fallen from 42% in 2017 to 32% in 2022. However, Walpole added that the EU was still the UK luxury sector’s biggest export market, ahead of the United States (22%), Asia (22%), and the Gulf (14%). 

Certification requirements and customs complexities among the sources of frustration 

Walpole stated that since the UK ceased to be a member of the EU, the country’s luxury sector had faced “significant challenges”, including heightened trade barriers, complicated paperwork requirements, and increased costs. 

The organisation said that businesses had suffered from delays in exports, driven by new certification requirements and customs complexities – a situation that disproportionately impacted brands with high customer expectations. 

Furthermore, according to the industry body, the application of rules between EU member states – and even between ports of entry – was variable. This, Walpole said, resulted in unpredictable timescales and costs arising from inconsistent enforcement. 

Other areas of concern flagged up by the trade association included – but were not limited to – businesses encountering difficulties with refunds and VAT reclamation, as well as challenges in sending product samples to journalists and influencers. 

“We cannot afford to have one arm tied behind our back” 

In light of these identified issues, Walpole set out a series of recommended actions to the Government. These advised steps included – but again, were not limited to – joining the Pan-Euro-Mediterranean Convention on Rules of Origin, putting in place a new digital labelling scheme, and negotiating enhanced VAT cooperation with the EU. 

Helen Brocklebank, CEO at Walpole, commented: “The British luxury sector has incredible growth potential… [but] we cannot afford to have one arm tied behind our back.” 

She added: “Strong links and favourable trading with Europe remain essential… alongside our success in other global markets, and key to supporting craft-led and high-value manufacturing in the UK.” 

To learn more about the role that our own digital strategy experts and online marketing professionals at Skywire London can play in furthering your growth objectives as a luxury, fashion, or lifestyle business in the UK, please don’t wait any longer to enquire to our team. 

Photo by Aananda Krishnan on Unsplash