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23/07/2019
Retail Chiefs Pull Together For No-Deal Brexit Warning
The leaders of Northern Ireland's two retail bodies have united to issue a stark warning for firms to be prepared for the reality of a no-deal Brexit.
Aodhán Connolly, Director of the Northern Ireland Retail Consortium and Glyn Roberts, Chief Executive of Retail NI made the call following the Department of Economy's report that 40,000 jobs in the region are at risk in the event of a no-deal Brexit. They also called for the establishment of a Brexit reference group.
Aodhán Connolly said: "Supply chains are only as strong as the weakest link so businesses need to start thinking about what goes into their products and where their products come from and go to. Businesses need to take action now to ensure that they have made the preparations and mitigations needed to keep their goods flowing. Any product that goes across the border, should that be a sandwich or a pizza, will need an Export Health Certificate. Businesses will also need to inform the Department of Agriculture, Environment and Rural Affairs (DAERA) exactly what is being moved. If a product is made of several ingredients, exporters will have to prove the provenance of each of the ingredients which adds cost and complexity to the supply chain."
It is estimated that checks on items crossing the border will increase by 100 times the current amount, with a 10,000% increase in Export Health Certificates. A single mixed load lorry could need 100 Export Health Certificates.
Businesses trading goods across the border in a no-deal scenario would face immediate increased costs and administrative burdens compared to the current frictionless and tariff-free movement of goods. Anyone who wants to trade into the Republic of Ireland or the EU must register for the Economic Operator Registration and Identification (EORI) scheme.
Glyn Roberts said: "It is hugely disappointing that the sign up rate for the EORI scheme in Northern Ireland is nowhere near where it should be even in comparison with the rest of the UK. It is essential that businesses start to engage with both DAERA and HMRC on these schemes, particularly micro and small businesses. The lack of proper preparation could mean the difference between make and break for some businesses."
Also important for the retail sector is the fact that the NI economy is more reliant on consumer spending than the rest of the UK. Research from UUEPC estimated that NI consumer spending accounted for almost three quarters of overall GDP compared to 65% in the UK.
Mr Roberts continued: "Our politicians must be aware of the effect that a no deal will have for our consumers. With households here having half of the discretionary income of GB households, any cost rises will be felt hardest in Northern Ireland. We need to protect our business and consumers."
Mr Connolly also pointed out the importance of the Irish market for NI retailers, saying: "Each year Irish household expenditure on shopping in NI is around €458 million, not just in the border catchment area, but right up as far as Belfast. All that is in jeopardy in a no deal Brexit scenario. Retailers must take a fundamental look at their business model and take whatever steps they can to mitigate and adapt before the October 31st deadline."
Both business leaders agree that while officials have done much work on the issue, more is needed. Mr Roberts said: "There is some genuine hard work being done by our civil servants in the absence of Ministers but there is a need to establish a Brexit reference group that combines business and the various departments, lead by the Head of the Civil Service that provides better coordination and communication in the run up to the 31st of October and that reference group needs to meet now."
Aodhán Connolly, Director of the Northern Ireland Retail Consortium and Glyn Roberts, Chief Executive of Retail NI made the call following the Department of Economy's report that 40,000 jobs in the region are at risk in the event of a no-deal Brexit. They also called for the establishment of a Brexit reference group.
Aodhán Connolly said: "Supply chains are only as strong as the weakest link so businesses need to start thinking about what goes into their products and where their products come from and go to. Businesses need to take action now to ensure that they have made the preparations and mitigations needed to keep their goods flowing. Any product that goes across the border, should that be a sandwich or a pizza, will need an Export Health Certificate. Businesses will also need to inform the Department of Agriculture, Environment and Rural Affairs (DAERA) exactly what is being moved. If a product is made of several ingredients, exporters will have to prove the provenance of each of the ingredients which adds cost and complexity to the supply chain."
It is estimated that checks on items crossing the border will increase by 100 times the current amount, with a 10,000% increase in Export Health Certificates. A single mixed load lorry could need 100 Export Health Certificates.
Businesses trading goods across the border in a no-deal scenario would face immediate increased costs and administrative burdens compared to the current frictionless and tariff-free movement of goods. Anyone who wants to trade into the Republic of Ireland or the EU must register for the Economic Operator Registration and Identification (EORI) scheme.
Glyn Roberts said: "It is hugely disappointing that the sign up rate for the EORI scheme in Northern Ireland is nowhere near where it should be even in comparison with the rest of the UK. It is essential that businesses start to engage with both DAERA and HMRC on these schemes, particularly micro and small businesses. The lack of proper preparation could mean the difference between make and break for some businesses."
Also important for the retail sector is the fact that the NI economy is more reliant on consumer spending than the rest of the UK. Research from UUEPC estimated that NI consumer spending accounted for almost three quarters of overall GDP compared to 65% in the UK.
Mr Roberts continued: "Our politicians must be aware of the effect that a no deal will have for our consumers. With households here having half of the discretionary income of GB households, any cost rises will be felt hardest in Northern Ireland. We need to protect our business and consumers."
Mr Connolly also pointed out the importance of the Irish market for NI retailers, saying: "Each year Irish household expenditure on shopping in NI is around €458 million, not just in the border catchment area, but right up as far as Belfast. All that is in jeopardy in a no deal Brexit scenario. Retailers must take a fundamental look at their business model and take whatever steps they can to mitigate and adapt before the October 31st deadline."
Both business leaders agree that while officials have done much work on the issue, more is needed. Mr Roberts said: "There is some genuine hard work being done by our civil servants in the absence of Ministers but there is a need to establish a Brexit reference group that combines business and the various departments, lead by the Head of the Civil Service that provides better coordination and communication in the run up to the 31st of October and that reference group needs to meet now."
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