The Oxford Economics study, commissioned by the British Beauty Council, discovered a marked decline in exports to EU countries despite sales holding steady in the rest of the world.
The research also found that the decline in EU workers had created skills shortage in the sector, while small beauty firms have been “disproportionately damaged” by post-Brexit barriers.
“Covid is not the problem – Brexit is the problem,” British Beauty Council chief Millie Kendall told Bloomberg. “People have pulled out of territories.”
Sarah Chapman, founder of Skinesis, told the website her company has stopped exporting to Spain and had been hit by major problems in selling to Italy and others.
“Our distributors are now really insisting that unless we set up an EU warehouse, they won’t work with us,” she said. “Once somebody’s bought from you, if it takes so long to get a product, they just don’t buy directly from you again.”
The industry body shared the report during British beauty week, as it revealed that Kate Moss was its new global ambassador.
It comes as the latest study by the British Chambers of Commerce (BCC) that 49 per cent of UK exporters have struggled to boost sales.
Among small and medium sized manufacturers, some 28 per cent reported a decrease in exports in the last quarter, while 45 per cent no change.
“The reality is if UK business is to thrive, then we must export more, it’s as simple as that,” said BCC’s head of trade William Bain.
“But the pandemic, supply chain disruption, Brexit, non-tariff trade barriers and global headwinds have all made this more difficult over the past few years … we need to look again at ways of improving trade with the EU.”
It comes as Kemi Badenoch, the business and trade secretary, goes to Osaka, Japan for the G7 trade summit. The cabinet minister said she was “not worried at all” by Labour denting the Tories’ traditional image as the party of business.
Ms Badenoch said Sir Keir Starmer’s “have not done their homework” and “assume the EU is the answer to everything”.