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'Costs will rise': UK and Irish retail groups warn of 'devastating' no-deal consequences

Tariffs that would be imposed in a no-deal Brexit scenario would result in an increase in costs for Irish shoppers.

Moore Street market in Dublin.
Moore Street market in Dublin.
Image: Shutterstock/Tupungato

GROUPS REPRESENTING RETAILERS have warned that Brexit will have a dire economic impact on the price of food and drink being sold here in Ireland.

Three retail organisations have warned how increased tariffs and new checks would lead to increases in the cost of making fresh food and drink – increases of up to 45% in some cases – and that it could lead to a shortage of some items. 

There are less than 40 days to go until 29 March, the date by which the UK must leave the European Union. The UK parliament has rejected the draft Withdrawal Agreement negotiated between EU and UK officials; the most ardent Brexit supporters say that their opposition is mostly to do with the Irish border backstop.

The backstop would mean that if a solution to avoid a hard border in Ireland isn’t reached, that the UK would remain aligned to the rules and regulations of the EU in order to allow frictionless trade between Ireland and Northern Ireland, and the rest of the UK.

But without agreement on the deal, and with no majority in the House of Commons for any alternative, Brexit talks are at a stalemate – a no-deal Brexit looks more unlikely than ever, although Taoiseach Leo Varadkar and Tánaiste Simon Coveney have said that it is still unlikely to happen.

This political uncertainty has caused a headache for businesses: as a number of groups have said, there is no “good” Brexit, just a least-worst Brexit, but the uncertainty means that businesses are limited in how they can prepare for trade and customs changes.

Today, Thomas Burke of Retail Ireland said that a “no-deal Brexit would have devastating economic consequences and must be avoided”.

“Regardless of the type of Brexit agreed over the coming weeks, retailers will see an increase in their operating costs arising from checks at ports and other supply chain disruption.

In the current operating environment, these additional costs simply cannot be absorbed and will have to be passed on to consumers in the form of higher prices.

“Our members continue to work hard to plan for all possible eventualities, but the ongoing uncertainty is damaging our industry and impacting our customers.”

Aodhán Connolly, the Director of the Northern Ireland Retail Consortium agreed with Burke, saying that a “no-deal Brexit brings tariffs, customs processes, checks and costs that our industry…  cannot afford to absorb”.

Our households already have half of the discretionary income of British households and less than those in the Republic of Ireland. A no-deal Brexit will hit us first and hit us hardest. This is not acceptable.

He said that if there’s a hard border, supply chains that have been built up over 40 years within the EU would be “disintegrated” – but that it couldn’t be a choice between the EU or the UK for Northern Ireland, as they need access to both markets “to survive”.

No-deal makes NI a less competitive place to do business and a more expensive place to live.

William Bain, Head of EU and International at the British Retail Consortium added:

“It is not just the people on the island of Ireland that this will affect. Those in Great Britain will see the price of goods from Ireland and Northern Ireland rise.

Two of Ireland’s main exports are beef and cheddar cheese. Ireland exports 87% of its cheddar cheese to the UK, and of the 90% of Irish beef that’s exported, 50% of that goes to the UK.

Today, the Irish Independent reports that the UK would introduce tariffs and quotas that would favour Brazilian beef over Irish beef (which is cheaper due to less checks and traceability). This would have a devastating effect on the Irish beef sector in Ireland, which is already suffering due to the fluctuating price of sterling. 

Our supply chains are highly integrated, with food ingredients coming from both Ireland and the EU, and 60% of the £2 billion of NI agri-food bound for the Great Britain crosses the Irish sea via Dublin.

“This will affect the price of shopping in the Prime Minister’s constituency of Maidenhead in the same way as it will in Belfast or Dublin, with cost rises.”

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