You may have heard of this whole Brexit thing. The departure of the United Kingdom from the European Union has been an eternal process, lasting since the beginning of time 1 and causing an unbelievable amount of stress and debate over that span of time. While no version of it would be ideal, the one hope that came from its lengthy process was that it would give the powers that be time to iron out any wrinkles that may have existed and mitigate any potential issues that could arise. That was the hope, at least.
John Hendrick and his team at Big Bang Comics – one of the finest comic shops in the world out of their Dublin, Ireland – location has immediately felt a massive impact from the full Brexit, or, effectively, the move forward with a new trade deal that was different than the existing one between the UK and EU. Already dealing with a country on lockdown due to the highest COVID-19 infection rate in the world at the moment, this has caused supply channel breakage, endless communication to partners, and a whole lot of stress. And it’s not just Big Bang seeing it. This is something effectively all vendors serviced by Diamond UK – the United Kingdom-based arm of Diamond Comic Distributors – are feeling.
It’s a big deal. So, naturally, I wanted to talk to John about it. That conversation is below, and consider it an explainer of a sort of what’s going on with the world of comics retail. It’s open to non-subscribers, but if you enjoy this kind of coverage, as per usual, here’s a reminder to subscribe to SKTCHD to support the site.
Alright, let’s flashback to the early days of this being a concern. You’ve been talking to me about the potential impact of this for…years? I want to say three, but it’s probably effectively since Brexit first was voted on. How long have you been trying to sort this out ahead of time to ensure Big Bang had as few issues to deal with when Brexit actually happened?
John Hendrick: Yeah, it’s been years. We started talking about it with relevant parties pretty much as soon as it happened, but we were rebuked by every distributor almost immediately at every turn. Every time the United Kingdom didn’t agree to a trade deal or every time their parliament voted against something, we would go back to them to express our concerns about what could go wrong and they would tell us the same thing: “We need to wait and see, this [worst case scenario] will never happen.”
It wasn’t until March 2019 when we emailed publishers directly and made it more public that we started to get taken a little more seriously.But the overwhelming feeling we got was that I was Chicken Little running around saying the sky was falling.
Little side note here, Brexit has been “happening” for a while now, The UK effectively left the European Union political entity a year ago, and 2020 was a transition year for everyone to get used to the paperwork requirements for international trading, so when the UK left the Common Market business area at the end of 2020 it would all be ready to go. Unfortunately, negotiations dragged on for far too long, with an agreement only being reached in late December 2020, leaving everyone barely no time to know how to fill out the paperwork needed starting January 2021.
Now that Brexit is finalized and the sky has actually come crashing down, the attitude’s different but no one can help. What we need now is actual governments to step in.
So the Irish government, in an effort to ease the backlog, has temporarily relaxed import rules so UK businesses can now learn how to really be “Brexit ready.” But they have made it very clear that the onus is on the UK government and UK companies and exporters to actually know and learn these procedures going forward fast. Because the vast majority shared the view that it’ll be all right and it’ll never happen.
But it has.
Second Side note: when the agreement was reached in late December 2020, the language used by the UK Government stated that the deal guaranteed no customs and no tariffs. Obviously, there are other expenses associated with international trade, but the vast majority of UK businesses understood that statement as meaning that business would be the same as before Brexit and there would be no extra paperwork needed at all.
What were your concerns about the potential of Brexit’s impact on your business?
JH: That it could literally shut us down.
We are in a weird and unique situation to the rest of the EU, since geographically we are right next door to the U.K.
What is means is that for worldwide distributors and companies who have a UK wing, we are in the UK’s catchment area and are to be serviced by their UK branches, and in a business where the vast majority of printed product we sell is in English, that’s 95% of our suppliers.
We have to get our comics from Diamond UK. We are not allowed hold a Diamond U.S. account. When the UK was in the EU that was fine. Our orders left the UK on a 24-hour service and we got them no problem. As they were a part of the EU there were no import duties or customs forms to be proceeded or fees collected. We simply bought from them, paid carriage and it was here for us to sell.
Now it’s a very different story and one that all UK companies seem to be completely unprepared for. As an example, here’s verbatim what a UK company just sent me today in regards to a very small order.
“We are so sorry for the delay in reaching out to you for the delivery of your order. Sadly, there has been a lot of confusion regarding the FTA (free trade agreement) that was reached between the UK and EU on the 24th December 2020.
The initial understanding was that free trade applied to all goods moving between the UK and EU and that our deliveries would resume as normal without the need for additional duty. We were also led to believe that the only difference would be documentational requirements.
We now know that this is not the case and that disbursement fees will apply to each shipment sent, along with an import duty on some products. Once this has been paid to DHL, your order will then be released for delivery to your door.
For your order: (£204.52) we have the following options available for you.
– We ship your order; you will then be invoiced by DHL (our courier) and need to pay for the destination country VAT (the VAT that is normally required) with the additional:
£15.00 : Import Duty (where applicable) and a disbursement fee in the destination country for the processing of documentation and payments.
£47.04 : Destination country VAT.
£62.04 : Approximate total payment required on the arrival of goods. This may vary slightly as a result of currency exchange.
– Cancel your order and receive a full refund.
– You arrange the collection of your order with shippers of your choice or we can arrange delivery to your UK shippers.
We will require a shipping certificate from you once you have received your order showing the goods have left the UK (this will be available from your shipper).”
That’s a real email from a real company regarding a tiny amount of product, but you can see that the cost is now 30% more expensive on that item solely due to Brexit, and yeah we can claim some of those back and offset them against our own tax liabilities but the very nature of cashflow within the business has now changed.
Now think about this on a business where 10K a week in comics alone isn’t uncommon. We stock and sell so many diverse ranges from so many suppliers that very quickly cash is eaten up.
What’s insane though is that email came from a distributor that has international customers, should be more than ready for this and turns out they had no idea how the trade deal between the EU and the UK actually worked.
How many of your concerns have become real now?
JH: Every single one. I sent an email to publishers in March 2019 and it’s pretty much become a checklist of what’s occurred already in week one.
I am writing this on the 11th of January and our comics from the 30th of December, January 6th and January 13th are still in the UK as they are unable to get customs clearance due to the insane backlog. Lines of communication are blurred and real time updates are practically impossible. The UK haulage systems are collapsing as we speak, there aren’t enough customs agents, food and medicine are (understandably) taking priority. Comics and toys are low on the list for trade between our two nations
When was the last time you received your new weekly comics?
JH: The week’s releases of December 23rd. Now, Diamond UK were closed for Christmas from end of business on the 24th of December to January 4th when our books from the 30th of December and January 6th were meant to leave together.
That didn’t happen as from what we understand the customs paperwork was not filled out correctly and it wasn’t until January 6th that those deliveries were picked up with an expected delivery date of January 7th.
It has sat in the transporters’ UK Warehouse since then as they can’t book the delivery on a ship because the customs clearance procedures in the UK is so over stressed they can’t generate the paperwork to get the certs to give it PBC (Pre-boarding clearance). Trucks without that are held at the port until one can be issued, and right now it’s not uncommon for those trucks to be there for days.
At the center of this issue for you is Diamond UK, your distributor for comics and some other products. What are they doing to help resolve the issue? And are you experiencing this with other product distributors, or just Diamond?
JH: Diamond UK are doing their best to improve this situation, but this is also an issue where they don’t have much control, as even if they fill out all the paperwork properly, there might be hundreds of trucks ahead of theirs that haven’t done their homework and are delaying everything anyway.
We are expecting updates from some other companies we work with, a lot of them don’t really ship out the first weeks of January. There’s been a lot of back-and-forth about our experiences so far, but no one in the UK seems particularly enthusiastic regarding delivery times improving going forward.
We talked about this, but I think it’s an important thing for people to know: how widespread of an issue is this? Is this simply a Big Bang issue, or is it much bigger than that?
JH: One, it’s affecting supermarkets regarding food deliveries. That’s how bad this is, let alone every other business.
Two, and in regards to comics, this affects every single shop in the EU right now. Shops in the UK have their comics, shops in Europe don’t unless they are pre-existing Diamond US accounts (there are a few) or only get a small number of comics that can literally be shipped out in a single box or two. As far as we are aware, most international Diamond UK customers have not received their pallet deliveries at all.
What options are available to you and other shops from the European Union in this situation? Do you have any recourse, or is it just hope that they get things sorted quickly?
JH: The hope is that this can get sorted out fast, but honestly the odds of that happening are slim due to complex political issues in the UK.
If that does not happen soon, we are going to have to have more discussions with Diamond as a whole about what they can do. If they shipped to us from an EU country rather than the UK that’d take care of a lot of issues. Failing that, until there’s a reasonable working system in place in the UK they could direct ship from the U.S, but that presents its own new and unique set of problems.
No new comics is obviously a massive issue. What kind of cost is this having on your business, and how long can you sustain without new product?
JH: This is a nightmare because new product drives all sales in our store.
On top of that we are in lockdown (again) and are only allowed operate as an online store (click and collect is currently unavailable due to Government rules), so getting new product for our customers to buy, to get them to come to the website and browse, is massively important.
Cashflow is bleak right now. Customers want to wait until the new books come in to fulfill their orders because they obviously want to save on shipping, get everything together and read the books they know have already been released elsewhere.
As a comic store to have no new comics is really pretty awful. Yes, our customers are great but they want the products, and a proportion won’t wait for us to sell them but get them elsewhere when and if they can, whether that’s ComiXology, torrents or buying from an American store. Right now, we are already 3 weeks behind. Dark Nights: Death Metal #7 has come and gone, Star Wars: High Republic #1 has started and Crossover #3 is a doozy and we have all of those things sitting in a warehouse somewhere. It’s maddeningly frustrating.
Everyone at the store is still employed, we still have rent, rates, bills etc. but we almost have no money at all coming in, our orders are way down because people want their new books as well as that graphic novel that they’ve had their eye on for the last while and I totally understand that.
One other substantial issue related to Brexit for you is you can’t actually ship comics to customers from the United Kingdom right now, which is insane. How big of an issue is that for you, and do you have any options at all to resolve it? Or is it just wait and hope for the best?
JH: We can ship comics as they’re printed matter, but no one knows how long it’ll take, outside of massively expensive couriers for these items to get there they just sort of go off and take longer, even tracking is crazy unreliable right now. Often it doesn’t get updated for days and then all of a sudden, it’s there and the tracking is filled in.
What no one can tell us right now is how to send merchandise and action figures, we are to apparently use new customs and tax forms but those don’t seem to exist yet and no one from the post office or couriers can tell us anything about it because they simply don’t know.
That’s really what’s going on here, no one knows how to do anything and we’re left in a weird limbo where business is suffering like hell and there’s no one to answer any of these questions. Because nobody thinks they’re responsible even the people who are and should have answers for these.
On top of that we’ve been told that we now have to register for UK VAT, charge UK customers the going VAT rate and give that to the UK government eventually. That’s like you buying an action figure from me and me giving the taxes to the state of Alaska. Traditionally I would just send it to you and if there were any import taxes on it, they would be collected by the postal company like Royal Mail in the UK. Now we have to do that work for the UK government which, I’ve got to be honest with you, just isn’t worth our while.
It’d be better to just suspend merchandise deliveries to the UK in general instead of having to get our accountant to also do UK VAT returns, something our accountant told us he didn’t do anyway because he lives and works in Ireland.
So, yeah, that’s a really good policy.
The today problem is obviously a big one. As an outsider, though, I’m concerned about the mid to long-term one. If Diamond UK is struggling this badly right off the bat and these issues start stacking up on top of each other, it could get even worse. Are you concerned about what this could mean for your shop throughout the rest of 2021, or are you confident that they’ll get things sorted eventually?
JH: It’s definitely going to get worse and is getting worse daily, I have spoken to numerous courier companies, freight forwarders and brokers etc this week and it’s going to hell fast. Nobody knows how to do what they’re supposed to and this was in the first weeks of January, those are traditionally quiet weeks for trade. But now that the early January lull is over, other shipping will ramp up and the backlog will go from mental to downright insane. I am not especially hopeful that this will get sorted out soon either as the UK’s not admitting any liability here despite them being barely a week into it. (As an example of what’s going wrong, their fishing industry is on the verge of collapse already because no one can export any god damn fish)
Even the Daily Mail are being critical of the UK government on this and that’s not exactly common. The Daily Mail, the most pro-Brexit tabloid that has ever tabloided.
We are at a loss as to what to do because there is nothing WE can do. This is on the companies that are shipping from to UK to Ireland (and the rest of the EU), and the vast majority of them simply weren’t and still aren’t ready.
The trade deal was so last minute that the UK couldn’t anyone up on the new rules, and a confusing spin on it (saying it was a free trade deal made people believe there would be no new extra costs as per the email I quoted above) did not help anyone.
The Irish government have had to step in and allow UK freight to come into the country temporarily even if is missing the proper paperwork, but this is only a temporary solution to help reduce the backlog (and there are a ton of trucks ahead of us with more important items like perishable food or medicines). This is not going to last forever, it’s a stopgap measure that will alleviate the symptoms but won’t make the problem go away.
Unless there is a real, viable solution soon I expect us to be facing long term disruption until such time a solution is found, either by the UK government or by companies like Diamond themselves.
Either way my job just got trickier, my business is currently underperforming and our customers are being underserviced and all of it is down to events beyond anyone in our supply chain’s control.
Dave, it’s a clusterfuck.
We hope we can weather this storm but a lot of smaller retailers are boned, plus a lot of European retailers will just stop carrying comics all together.
We thought 2020 was bad, 2021 is not off to a great start.
I’m being told it was actually June 2016 when the initial referendum was voted on.↩