The Prospects For The British Barter Exchange Industry

The ‘barter’ of goods (or services) for goods (or services) between companies, either on a bilateral basis or (more usually) via the intermediation of a broker, has been growing rapidly in recent years. In the United States, barter transactions between US companies amounted to an estimated $9bn in 1995. While historically a US phenomenon, the practice is increasingly spreading to Europe, Asia and Australia. There is now a growing number of socalled ‘barter exchanges’ operating in Britain and continental Europe. The primary purpose of this paper is to assess the prospects for the development of the British barter exchange industry over the medium to long term. It provides an overview of barter exchanges, examining the US barter exchange industry, which is at a much higher level of development than its British counterpart, in order to identify the way in which the industry operates and the factors which are critical to its growth. It then assesses the prospects for the British barter exchange industry, drawing upon the lessons of the US experience.