The Retailer Winter 2018/19

NEWS FROM THE BRC Approaching the midnight hour for Brexit

William Bain Policy Advisor , Europe and International British Retail Consortium

It’s increasingly clear that the political and business cycles around Brexit have become badly detached. Businesses are clamouring for certainty in both their trading terms and the laws which underpin them well before the scheduled date for UK exit from the EU onMarch 29. Companies in the retail industry are doing everything possible to improve the efficiency of their supply and sourcing chains, check that their contracts with suppliers and others are Brexit-proofed, and prepare their key delivery teams on VAT, excise, product standards, compliance, and customs. But what are they preparing for? In the absence of a ratified deal from the UK Parliament with fewer than 50 days to go until departure day, millions of pounds and countless working hours have been spent on preparing for the worst – a no deal outcome. Unless circumstances change, a no deal outcome wouldmeanMFN tariffs as high as 45% on cheddar, 39% on beef, and 28% on tomatoes applicable to cross-border trade between the UK and EU27 fromMarch 29. Furthermore, the UKwould fall out of the majority of the existing trade agreements negotiated by the EUwith 75 other territories and countries, meaning tariffs on imported clothing and textiles rising from zero currently to an average of 12%. Added to the overnight establishment of step non-tariff barriers to UK-EU27 trade from customs, VAT, and particularly sanitary and phytosanitary requirements on the movements of fresh food produce, new hurdles to trade would arrive as the UK falls out of

hundreds of pieces of legislation underpinning the EU SingleMarket and Customs Union which have been the hidden wiring of cross border trade for decades. This is especially pressing in terms of its implications for Northern Ireland and its land border with the Republic of Ireland, given that many goods moving to and fromNI do so via the Dublin- Holyhead route – possibly crossing different regulatory territories several times in the journey to get goods on the market. Toomuch of the debate occurs in a bubble atWestminster, disregarding the effect on incomes and choice of goods for consumers on the average wage in England, Wales, Scotland, and Northern Ireland, where the impact of a no deal on living standards would be the worst of all. Decisionmakers need to know the more they run down the clock, the greater is the burden of lost investment by retailers and other companies as more cash and resources have to go into ensuring no deal preparations are completed as prudent businesses must do. Above all, what companies want is clarity, so they can do what they are best at – providing quality goods at affordable prices, and investing for the long-term in their staff and their businesses. Without a clear view of a post brexit, retailers still need to ensure a timely and efficient transit of goods from the EU to the UK. Join our roundtable discussion ‘Unpacking Brexit’ at DPWorld London Gateway on the 20thMarch brc.org.uk/events/dp-world-roundtabletour

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