Home Markets Brexit: M&S temporarily cuts hundreds of products in NI

Brexit: M&S temporarily cuts hundreds of products in NI

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Marks & Spencer’s has temporarily stopped selling hundreds of items in its Northern Ireland stores due to Brexit red tape.

The retailer said it feared its food would be blocked due to new rules governing shipments between Great Britain and Northern Ireland.

A growing number of firms have spoken out about paperwork delays at ports.

The government said traders and hauliers need to take steps to comply with new border rules.

M&S took the decision to temporarily drop hundreds of products, including chocolate fudge pudding and sweet and sour chicken, from its Northern Ireland stores after it saw competitors’ lorries barred from travelling between the mainland and Northern Ireland.

An entire consignment in a lorry can be held up if only one item in the truck doesn’t have the correct customs forms filled out.

The retailer said it aimed to get the products back up for sale soon.

An M&S spokesperson said: “We have served customers in Northern Ireland for over 50 years and our priority is to make sure we continue to deliver the same choice and great quality range that our loyal customers have always enjoyed.

“Stores have been receiving regular deliveries this week, however following the UK’s recent departure from the EU, we are transitioning to new processes and we’re working closely with our partners and suppliers to ensure customers can continue to enjoy a great range of products.”

Tax on Percy Pig

In addition to problems shipping goods internally in the UK, the new Brexit trade rules are creating problems for exporters and traders transporting goods to and from the EU, say firms.

The UK sealed a trade deal with the European Union (EU) on 24 December that was billed as preserving its zero-tariff and zero-quota access to the bloc’s single market.

But in addition to red tape causing delays, major retailers that use the UK as a distribution hub for European business could face possible tariffs if they re-export goods to the EU.

On Friday, M&S chief executive Steve Rowe warned of more red tape and a rise in export costs to some countries.

“The best example I can give you of that is Percy Pig,” he said,

“Percy Pig is actually manufactured in Germany. If it comes to the UK and we then send it to Ireland, in theory it would have some tax on it,” he added.

M&S said it was “actively working to mitigate” the effects of the “rules of origin” regulations, under which products are taxed differently depending on which country they come from.

Other firms have also been hit by the confusion caused by new Brexit trading rules.

Parcels giant DPD has suspended some services, while seafood exporter John Ross said the chaos was like being “thrown in the cold Atlantic without a lifejacket”.

Shane Brennan, chief executive of the Cold Chain Federation, which represents chilled transport and storage companies, said the emerging problems had come despite the amount of cross-border traffic still being quite low.

“Trade flows are still only about 50% of what we would expect, but even at those levels we are seeing levels of confusion and delays,” he told the BBC’s Today programme. “The feeling is we are building to quite a significant potential disruption.”

A government spokesman acknowledged that there had been “some issues”, but said ministers had always been clear there would be some disruption at the end of the transition period.

The Cabinet Office said in a statement that the volume of border crossings had been low so far this year, but that it expected crossings to steadily increase to normal levels.

This brings the potential for “significant disruption if traders and hauliers have not taken the necessary steps to comply with the new rules,” the Cabinet Office said.

Out of about 1,500 lorries per day trying to get from Great Britain to the EU in the new year, 700 have been turned away – mainly due to a lack of a negative Covid test for drivers, it said.

“We have always been clear there would be changes now that we are out of the customs union and single market, so full compliance with the new rules is vital to avoid disruption,” said Cabinet Office minister Michael Gove.

However, anger is growing among companies whose livelihoods depend on export trade.

In a letter on Friday to Business Secretary Alok Sharma, Scottish salmon producer John Ross Jr launched a stinging attack on the government’s handling of the situation.

The firm’s sales director, Victoria Leigh-Pearson, wrote that the company had in recent months “had to endure the government issuing a barrage of useless information” and an “absence of factually correct information from all government agencies.” It amounted, she said, to “gross incompetence”.

Part of the letter to Alok Sharma:

As I write, perishable goods that were dispatched from our facility five days ago, headed for France following a process that your department advised, have still not crossed the border. This usually takes only 24 hours because they are consolidated with the produce of other companies, which have not been able to follow the correct procedures due to a knowledge gap directly attributable to your department.

Entire trucks are currently being rejected without explanation by the French customs authority. Our hauliers have now pulled their services as such a backlog has been created. Other hauliers are not taking on new customers. Today, we’ve even had confirmation that the IT systems of the UK and France are incompatible. After four years you only establish this now?

Your so-called ‘deal’ is worthless if this situation is not fixed immediately, and unless you put in place measures to address the issues that continue to unfold on a daily basis. Moreover, as a seafood exporter, it feels as though our own government has thrown us into the cold Atlantic waters without a lifejacket.

Yours sincerely, Victoria Leigh-Pearson, Sales Director, John Ross

Perfect storm

John Ross is not the only Scottish seafood exporter suffering. The industry says it has been hit by a “perfect storm” of Brexit disruption, which could sink a centuries-old industry.

“These businesses are not transporting toilet rolls or widgets. They are exporting the highest quality, perishable seafood which has a finite window to get to markets in peak condition,” said Donna Fordyce, chief executive of Seafood Scotland.

“If the window closes, these consignments go to landfill.”

She said the sector has already been weakened by Covid-19, the closure of the French border before Christmas as well as “layer upon layer” of problems associated with Brexit.

The group fears that without exports, the fishing fleet will have little reason to go out.

“In a very short time, we could see the destruction of a centuries-old market which contributes significantly to the Scottish economy,” added Ms Fordyce.

UK government Minister for Scotland David Duguid blamed Scottish leaders for the issues.

“The Scottish Government has persistently refused to accept the democratic vote to leave the EU, but that does not allow them to abdicate their responsibilities to Scottish businesses,” he said.

“Over the past 18 months they have assured the fishing industry that the systems they were putting in place would be adequate. They clearly are not.”

Lost in the mail

Parcel delivery service DPD UK said it had paused its European Road Service because of the ‘”increased burden” of customs paperwork for packages heading to the EU, including the Republic of Ireland.

DPD said 20% of parcels had “incorrect or incomplete data attached”, which meant they would have to be returned.

In an email to its business customers, the company said that it had been a “challenging few days” for its international operation, and that it would “pause and review” its service. It plans to restart on 13 January.

“It has now become evident that we have an increased burden with the new, more complex processes, and additional customs data we require from you for your parcels destined to Europe” the firm wrote.

Hauliers grinding gears

The boss of one of Wales’ largest hauliers said logistical problems have emerged at the Irish border too.

Andrew Kinsella, managing director of Gwynedd Shipping, said his company has a backlog of 60 lorries waiting to be shipped to Dublin.

He said many hauliers are finding that their customers are not able to generate the special declarations that are needed to ultimately enable a lorry to get onto a ferry.

“Whilst you don’t see queues at ports and terminals the reality is that these queues are developing elsewhere in our depot in Holyhead, in our depot in Deeside and in our depot in Newport in South Wales, and lots of hauliers have depots in the proximity of ports,” he said.

“There are a lot of issues about demarcation about who is going to arrange the export declaration with the UK revenue authorities, who’s going to arrange the import declaration, the hauliers then trying to arrange the import safety and security declaration to create an ENS number which helps you generate a PBN number so there has been a lot of everyone finding their feet”.

Read from source: https://www.bbc.com/news/business-55583244