Photo by Dave Crosby, Flickr Creative Commons.
New research independently commissioned by Barclays Corporate Banking shows that products labelled ‘Made in Britain’ command a considerably higher premium when sold abroad than those with no declared country of origin.
When consumers in eight key export markets see the Union Flag on a product, their inclination to buy increases. This is especially true in new and emerging markets, where two thirds of consumers (64%) would be more inclined to purchase a product carrying the Union Flag.
The report’s findings sought to understand the value of ‘Brand Britain’ for export purposes in comparison to the brand values of Made in England/Wales/Scotland. The research combined ONS export data with a survey of 7,610 individuals in eight key export markets (France, Ireland, Germany, the US, Brazil, South Africa, China and Qatar) designed to examine the premium they’re willing to pay for different goods labelled as Made in Britain/England/Scotland/Wales.
When labelled as Made in England/Scotland/Wales, goods tend to command considerably lower premiums than Made in Britain. The only case where this isn’t true is for alcoholic beverages, where the branding Made in Scotland adds a greater premium than Made in Britain in several countries, particularly in the US and Ireland. However, this isn’t replicated in new and emerging markets, where alcoholic beverages branded as Made in Britain commanded bigger premiums in China and South Africa.
The research, which examined product categories including food, drink, fashion, precision tools and automotive, found that:
The report estimates that of the up to £2.1bn premium gain in the eight markets surveyed by labelling goods ‘Made in Britain’, the highest gains, in the order of £0.8bn, would be obtained for exports to the US, the market to which the UK exports the most in absolute terms, followed closely by £0.7bn to China, a country to which UK exports have accelerated rapidly over the last decade.
Across a basket of goods, the additional average gain per transaction for products marketed as ‘Made in Britain’ are highest for food in Qatar (£0.46), for alcoholic beverages in the US (£0.42), for fashion in Qatar (£1.26), for precision tools the US (£0.55) and for automotive in South Africa (£1,004).
“While British businesses are currently reliant on the EU and the US for the majority of their exports, they are well placed to expand into new and emerging markets,” said Rebecca McNeil, head of business lending at Barclays Corporate Banking. “The report shows that the biggest premiums for British branded goods will be paid in these markets, not the developed markets. These new and emerging markets are also growing at a faster rate than the established trading partners, meaning growth opportunities and premium pricing are aligned.
“We understand that these new markets can be more challenging to enter but for those that persevere, there are opportunities for a greater return. Rather than focusing on seemingly saturated developed markets, exporters should seriously consider looking further afield as there are bigger premiums to be had when products are marketed as Made in Britain.”
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