A growing number of retailers and courier firms are suspending or cutting back deliveries into the EU as companies grapple with new border controls as well as import taxes.
On Friday DPD, the international delivery giant, said it was “pausing” its road service from the UK into Europe, including the Republic of Ireland. Separately, Marks & Spencer said it was concerned that a third of the products in its Irish food halls, including Percy Pig sweets, would now be subject to import tariffs. Such taxes could spell higher prices for shoppers.
DPD said new border procedures, including additional customs paperwork, needed for parcels destined for Europe were putting extra pressure on turnaround and transit times.
The company said it was returning one-fifth of parcels to the sender because they had incorrect or incomplete data attached. It also blamed delays and congestion at UK ports for its decision, as well as more rigid requirements for Channel crossings. The firm said it hoped to restart the service on Wednesday.
Although the government sealed a “tariff-free” trade deal on Christmas Eve, it has emerged that food and clothing products that do not qualify as made in Britain could be hit with levies.
Under the agreement, if more than 40% of the pre-finished value of a UK firm’s product was not British, it would attract tariffs.
Boris Johnson was said to have swerved the topic of Brexit impact in a call with more than 200 business leaders earlier this week.
“It was a meaningless call, it was all mottoes – we are going to build back business better, build back business greener – and a few patsy questions about how much better it would be, nothing about the realities of Brexit and Covid hitting us all hard,” said one business leader.
The department store chains Debenhams and John Lewis, which recently closed its international business, are among the big names no longer serving the Irish market. Fortnum & Mason, the famous London department store, has also temporarily ceased shipping to Northern Ireland and EU countries.
The bookseller Waterstones has also suspended sales to customers in EU countries, as has the fashion chain Jigsaw.
Retailers have been hit by the cost of customs paperwork that applies to all imports and exports, including goods moving from Great Britain to Northern Ireland.
M&S has temporarily cut nearly 400 products from the food and drink aisles of its 20 stores in Northern Ireland. Sainsbury’s has made a similar move and filled the gaps on its shelves with products from Spar shops. The moves are designed to simplify the business and so avoid the delays at the border amid reports of retailers having trucks turned back.
The reduction of M&S’s range equates to about 5% of the 6,500 products usually sold in M&S food halls and includes popular ready-meals such as lasagne and beef bourguignon, as well as takeaway salads and some essential lines such as bread, sugar and teabags.
A spokesperson for M&S said it had served customers in Northern Ireland for over 50 years and its priority was to provide the “same choice … our loyal customers have always enjoyed”. Its stores had been receiving regular deliveries this week but the changes came as it moved over to new processes, he said.
M&S has also warned that more than 2,000 of its food products, including Percy Pigs, could attract new import taxes when re-exported to its stores in EU countries such as Ireland and France. The new “rules of origin” regulations dictate whether tariffs must be paid based on where a product’s ingredients come from and where it has been manufactured.
The M&S chief executive, Steve Rowe, said: “Tariff-free does not feel like tariff-free when you read the fine print. For big businesses there will be time-consuming workarounds but for a lot of others this means paying tariffs or rebasing into the EU.”
Tesco said it had experienced short delays moving goods into Northern Ireland but that it had a “good supply of products coming into Northern Ireland”. It added: “There has been a short delay on certain products but we’re working with suppliers to get these back on the shelves as quickly as possible and direct customers to alternatives where we can.”
Tesco said it was discussing the rules of origin regulations with HMRC and Irish Revenue and hoped “to find a satisfactory resolution as quickly as possible”.
The British Retail Consortium said: “At least 50 of our members, all of them large retailers, face potential tariffs for re-exporting goods to the EU.”
Dominic Goudie, the head of international trade at the Food and Drink Federation, said some product-specific rules meant exports were no longer viable, with “serious challenges for supply chains that span across the UK and EU”.
He also said EU-produced food and drink that moved to other EU markets via Great Britain without further manufacturing taking place in Britain faced the payment of full EU tariffs on return to the EU.
“As a result, suppliers are being forced to cancel deliveries of products to customers, particular those in Ireland,” he added.
One unnamed source for a logistics business spoke of mayhem behind the scenes. He described how one truckload of parcels had to be completely offloaded and relabelled on Thursday night before export to the EU, simply because one line on the code for goods was wrong.
He also told of companies hiking charges for invoices to £3.50 a parcel going to Europe, making low-value goods too expensive to export.
John Arbon Textiles, a small artisan knitting wool company in Devon, said it had been told by DPD that its spools and balls of fibre would not be accepted in Europe.
“I feel DPD are being cautious, but I have no confidence that I can send anything to my customers in the EU at the moment,” the business’s owner, Juliet Arbon, said.
Northern Ireland’s chief vet has said goods arriving in the region, which is now following EU rules for imports, would be destroyed or returned if not compliant after a short grace period.
Robert Huey told a Stormont committee that some companies contracted to do the paperwork for hauliers were “overwhelmed” and in one case a staff member had to show a major supermarket how to complete its paperwork.