Brexit: Supermarkets face uphill battle from 1st January- What effect will this have on NI shoppers?

By Rebecca McGirr

Covid 19 has already taken its toll on supermarkets this year and Brexit is just days away. Northern Ireland supermarkets feel unprepared, in desperate need of answers from the government, and are just waiting for the severe impact it will have on their customers from January 1st.

Aodhan Connolly, Director of the Northern Ireland Retail Consortium says that Covid 19 and lack of information from the government, has impacted supermarkets’ plans to get ready for Brexit.

He says, “because of Covid we had increased costs, lower profit margins and an inability to get ready for this in the same way we would have liked.”

“But the biggest thing is that we have not had the information from government that we need and there is still information outstanding that we need.”

The UK and EU agreed on a trusted trader scheme which would give supermarkets extra time to phase in new checks, ensuring that food supplies from Great Britain to Northern Ireland would not face disruption from the 1st January, whether or not there was a Brexit deal.

This grace period will initially be for three months with six months guaranteed for chilled meat products

However, Connolly says, “the three months is not an extra transition period,” and “there is still is a lot to do with very little time to do it.”

He says, “we still need to get custom declarations ready for day one. And that is a task.”

“The average supermarket will hold about 50,000 products and each of those moving from Great Britain to Northern Ireland will need a separate customs code inputted. That needs people and time to do it.”

He warns that there could be food shortages. He says, “if the customs codes and declarations are not correct then the lorry isn’t able to get onto the ferry and we will have shortages in the shops.”

“There are still three IT systems that have not been tested yet that we are concerned about that have to be used on the 1st January.”

After the three month grace period agri food products such as meat, milk, fish and eggs coming from Great Britain to Northern Ireland will need an export health certificate.

These certificates are quite expensive costing up to 200 pounds per product and they also need to be signed off by a vet.  

The government have agreed under the “movement assistance scheme,” to cover “reasonable costs,” for these export health certificates even after the grace period. This is good news for supermarkets. However, this could prove quite costly for the government and there is uncertainty about how long they will cover these costs.

Also, chilled meat products which were deemed high risk coming from Great Britain would have been unavailable to Northern Ireland supermarkets because there were no export health certificates for these products.

The trusted trader scheme will allow chilled meat products to move from Great Britain to Northern Ireland for a six month period, but that is just for a limited period of time.  

If there is no arrangement made between the UK and the EU on these issues, Northern Ireland supermarkets may need to rely solely on sourcing these products locally, from the republic or from the EU.

Connolly says, “we already buy 2.6 billion of Northern Ireland agri food every year. So we already buy a huge amount from Northern Ireland and we don’t know if we can source anymore from here. There would have to be a growth in the market to do that.”

“We could perhaps do it from the EU and the Republic of Ireland.”

But he believes that “moving supply chains” could cause “friction,” and “friction equals cost.”

He says, “if we are buying things from the EU and not from GB like we usually do, then there are things like extra costs because of different systems. Currency fluctuations and exchange rates all have to be factored in.”

Checks at Irish Sea border posts could mean potential delays for supermarket shipments coming from Great Britain to Northern Ireland. These delays could shorten the shelf life of products and mean less choice for customers.

Connolly says, “we already have 18 hours less shelf life than Bolton or Birmingham just because of our geography, and if there are delays that will effect especially at this time of  year, fresh food. “

“Ninety percent of lettuce comes from the EU, eighty five percent of tomatoes, sixty five percent of soft fruit comes via the land bridge in Great Britain so if there are problems in Scotland getting the lorries on the ferry, then it is going to affect the availability of choice.”

Steven Henry, store manager of Asda in Omagh says delays “impact massively on the whole operation of the shop.”

He explains that deliveries usually come in at night and people on the night shift work what he calls “the load,” which involves sorting out products and putting them into the correct areas of the shop.

But if the delivery comes in late the next day, he says, “you have to take people off tills and from other departments in the store to get the load worked, so their job roles stop working and customers aren’t getting service.”

He says, “it will impact on cost line because you have to pay more people do it. Plus, there is the cost of who is driving the lorry, they only have a certain number of hours they can drive a day so you might need another lorry driver and there is the fuel cost that goes with that.”

He says, “if we have added costs there is only one way to get those costs back and that is to raise the prices.”

Connolly confirms this, stating “food retail prices are going to increase.”

He says, “I can’t see any sort of Brexit where there won’t be cost rises. But what we are trying to do at the moment is mitigate those cost rises and make it as small as possible.”