Persistence Of Northern Ireland Trade Issue Could Force British Grocers To Shift Supply Chains To EU

If the issues and the future of Britain-Northern Ireland trade are not addressed with urgency, some of their supply chains could be shifted from the United Kingdom to the European Union by British supermarket groups which include the market Tesco as well as its peer Sainsbury’s and Asda, the companies said on Sunday.

The Northern Ireland protocol governs the current post-Brexit trading arrangements between Britain and Northern Ireland. The agreement was designed to achieve a balance between keeping open the border of the province with EU member Ireland so that the 1998 Good Friday peace deal remains protected while being able to stop goods from entering the single market of the EU unchecked across that border.

That arrangement essentially keeps Ireland within the single market of the EU with respect to goods. However this also requires imposing controls on goods arriving from mainland Britain. A grace period ends in October.

Unless a solution to the issue is found, the supermarkets will face an increase in cost and complexity starting in October while moving goods from Britain to Northern Irelands, said the CEOs of the three supermarket chains along with the chiefs of Marks & Spencer, the Co-operative Group and Iceland, in a letter to Britain’s Brexit minister David Frost and European Commission vice president Maros Sefcovic.

The concerns of the grocers arises from the fact that an increase in checks at Northern Irish ports and additional paperwork requirements as well as the requirement for Export Health Certificates on products of animal origin is expected to not only increase costs but to also make moving goods across the border more complex and time consuming.

“The challenges this will create in sourcing could force many retailers to move supply chains from GB to the EU,” they said.

The EU and the UK struck a temporary truce last month to a dispute that has come to be known as the “sausage war” as the two sides extended a grace period for shipments of certain meat products from Britain to Northern Ireland.

“Much more needs to be done before the end of September if there is not to be significant disruption to supply and an increase in cost for Northern Ireland consumers,” the CEOs said.

The supermarkets want the UK government to hold talks with the EU in this matter.

“Without swift, decisive, and cooperative movement on this issue there will be disruption,” the CEOs said.

A number of solutions for the issue have also been provided by the British supermarket chains which include the two parties striking a veterinary agreement, or a wider Sanitary and Phytosanitary (SPS) deal or a facilitated movement scheme or a Trusted Trader scheme.

The letter was coordinated by industry lobby group the British Retail Consortium.

(Adapted from Reuters.com)



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