Not preparing for EU DPP rules could cost average UK business £1.5m a year – study

You’ve been warned. Businesses unprepared for upcoming regulations which will require products exported into the EU to have a Digital Product Passport (DPP) could cost them £1.5 million a year in lost revenues, according to supply systems provider GS1 UK.

Set to be first introduced in 2027, the new regulation from the EU will require brands and retailers to provide detailed information on products entering the trading zone, “in an effort to achieve the EU’s long-term ambition to reach net zero”. 

This includes data on a products’ origins, materials, environmental impact, and supply chain journey, with the aim of boosting transparency, circularity, and sustainability. Sectors including textiles will be among the first to be affected, with other industries to follow by 2030.

However, according to new research from GS1 UK, many businesses in the UK remain unprepared. Only 16% of managers or higher surveyed at businesses that trade with the EU believe they are fully prepared for DPPs, and 79% say they are concerned that they could be prevented from trading with the EU for failing to comply with the regulation.

“This could have disastrous consequences for UK businesses”, says GS1. Based on the mean average value of goods exports to the EU per business, it estimates that exporters who fail to meet DPP requirements could risk losing around £1.5 million in annual revenue, “as failing to comply could result in products being turned away at the border”.

According to those surveyed, this could be 45% of their total annual revenue, with 31% of businesses saying they would not survive if they were no longer able to trade with the EU.

For initially targeted businesses including textiles, “the regulation represents a significant challenge”, as the research found that almost one in five businesses across these sectors (17%) are not confident they know what the DPP will require. 

“This challenge is particularly acute for the textiles industry, which has faced a difficult five years since Brexit, as UK textile exports to the EU fell by 63% between 2019 and 2023, the report noted

Anne Godfrey, CEO of GS1 UK, said: “The DPP is not a distant regulatory concept, it’s a fast-approaching reality that could fundamentally reshape trade with the EU. The clock is ticking and businesses need to get their data in order, or risk being locked out of a £300 billion export market.  

“Businesses must act now to prepare. There is also a need for swift practical support and guidance by the government to minimise the risk of economic damage of non-compliance.”