Merch pros in Europe’s second-largest national market for promotional products sales are facing a new threat.

Authorities in the United Kingdom are working to enact a far-reaching ban that will prohibit the nation’s governmental departments from spending money on branded merchandise under most circumstances.

The U.K.’s Cabinet Office, a ministerial department that aims to support the prime minister, Cabinet and effective running of government, is requiring all departments of the government to review their policies regarding what it terms “corporate-branded and non-essential merchandise, with a view to restricting future purchases.”

In a notice, the government said departments will only be allowed to spend on merch/promotional products when doing so is “essential for delivering the government’s agenda, for example, in overseas trade and diplomacy, to promote growth.”

The notice said the U.K.’s government has spent thousands of pounds on goods branded with department logos and slogans. Products include mugs, sweaters and sweatshirts, water bottles and fidget cubes.

Nearly $2.02 billion
Annual promo distributor sales in the United Kingdom in 2023. (ASI Research)

Patrick McFadden, a Labour Party politician who has served as Chancellor of the Duchy of Lancaster since July 2024, called such investment “wasteful.”

“By cutting wasteful spending, we can target resources at front-line public services with more teachers, extra hospital appointments and police back on the beat,” McFadden said in a statement.

He continued that savings gained from a cut on merch spending and other measures will be used to help “kick-start” economic growth, rebuild the U.K.’s national health system and strengthen borders.

In announcing the merch ban, the Cabinet Office also said it was outlawing “away days” – essentially, offsite meetings for staff training and development. “Officials will now be instructed to hold training and team-building exercises and ‘away days’ in government buildings that are available for free, instead of hiring external venues,” the government notice said.

Promo Impacts

The promo business has become increasingly global, and more North American distributors are operating in and increasing sales efforts in the U.K., with Counselor Top 40 distributors Geiger (asi/202900) and BDA (asi/137616) among them.

The #promoproducts industry is becoming way more globally interconnected. That's why this in-depth look into the state & performance of the #merch market the United Kingdom and Ireland is a worthwhile read for industry pros on both side of the pond. https://t.co/92SbP36gkP

— Chris Ruvo (@ChrisR_ASI) February 6, 2025

The obvious takeaway from a U.K. ban on government departments buying merch is that if the prohibition goes forward as outlined, any distributor that works with those governmental departments is looking at a likely drop in business with such customers.

Jeff Lederer, co-owner of Europe-based supplier Premium Square Group and head of an investment firm that owns Counselor Top 40 distributor Myron (asi/278980), which operates in North America and Europe, said the merch ban move by the U.K. government adds further complication to a volatile global marketplace that’s already reeling from trade war and tariffs.

“With the U.K. government ban, the big risk is businesses take a cue from the government and follow suit with a ‘ban’ of their own,” Lederer told ASI Media.

Despite being dubbed “wasteful,” studies of the North American branded merchandise market from ASI Research show the cost-effective, powerful impacts of promotional products. The U.K. notice mentions spending on branded mugs as wasteful; ASI Research’s Ad Impression Study shows that cost per impression for a $10 insulated travel mug is 1/3 of a cent – an effective means of raising awareness about, say, a governmental department and how it serves constituents.

ASI Research also shows that promo distributors in the U.K. generated nearly $2.02 billion in merch sales in 2023. The only nation in Europe where distributors tallied higher annual sales that year was Germany – at a little over $3 billion. ASI Research will be releasing a new study on the 2024 performance of the U.K./European promotional products industry later this year.

Meanwhile, a study from Sourcing City found that distributors in the U.K. and Republic of Ireland collectively increased total annual revenue to £1.232 billion in 2024 – above $1.57 billion at today’s conversion rates. An ASI partner in Promo Alliance, Sourcing City is an England-based trade service organization that provides a suite of solutions to the U.K.’s promotional products market.

The Sourcing City research noted that clothing is significantly underreported in its study because the report doesn’t account for sales of apparel by textile printers, specialist clothing resellers, distributors who buy directly from clothing suppliers and suppliers that sell direct to end-users.