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What to Watch: Brexit and Britain’s Beauty Business

About 66 percent, or 2.34 billion pounds worth, of the U.K.’s beauty export sales were generated in the European Union in 2016.

As transition talks regarding Brexit rev up in January, many beauty players remain mum on their strategy for the U.K.’s impending divorce from the European Union, which could have widespread ramifications on their bustling businesses.

According to the Cosmetic Toiletry and Perfumery Association — 66.2 percent, or 2.34 billion pounds worth — of Britain’s beauty export sales were generated in the EU in 2016, the most recent figures available. That zone is the U.K.’s largest trading partner for fragrance and beauty products, led by the Irish Republic, Germany and Belgium, and followed by the U.S. as the second-largest market. Meanwhile, sales of products to non-EU countries were valued at 1.2 billion pounds.

Also in 2016, the EU — with France, Germany and Poland the top three countries — produced 67.1 percent of the U.K.’s beauty imports, equaling 2.48 billion pounds.

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Beauty represents a big business for Britain at home, as well, where it employs 200,000 people and was valued at 9.38 billion pounds in retail sales in 2016, according to the CTPA.

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“The people of the United Kingdom have decided to leave the European Union, and the U.K. cosmetics industry is working with the government to ensure that, once the U.K. leaves the EU, our industry can continue to prosper,” wrote the association in a position paper entitled “Getting the Best from Exiting the EU.”

In it, the CTPA outlined the cosmetics industry’s three key asks. They are:

• Remain in the Customs Union until a free trade agreement with the EU is reached;

• Provide a clear and reasonable phased implementation for changes to U.K./EU trade between leaving the EU and signing a full free trade agreement, and

• Avoid additional administrative trade barriers by securing administrative cooperation with EU competent authorities for cosmetics after the U.K. has left the EU.

No one knows yet what form Brexit will take — and therefore how it will impact Britain’s beauty trade specifically — but Prime Minister Theresa May has said it is to happen officially on March 29, 2019.