M&S warns EU proposals on N.Ireland trade risk more friction and cost

By James Davey and Juby Babu

LONDON (Reuters) – British retailer Marks & Spencer warned the UK government on Wednesday that proposals set out by the European Union to ease the transit of goods to Northern Ireland risked increasing the administrative burden rather than reducing it.

In a letter to UK Brexit Minister David Frost seen by Reuters, M&S Chairman Archie Norman said the EU’s proposals “sound reasonable, but could result in worsening friction and cost and a high level of ambiguity and scope for dispute.”

Last month, the EU offered Britain a package of measures which stopped short of the overhaul that London is demanding.

The EU’s executive said the measures could halve customs paperwork and cut checks on meat, dairy and other food products coming to Northern Ireland from mainland Britain by 80%.

In return for concessions, the EU wants proper sharing of live data, reinforced monitoring of supply chains and labelling to ensure British products do not slip into the EU single market via a Northern Ireland back door.

Norman said the proposals could end up more costly to implement than full EU custom controls, with the relief offered in lighter touch border controls insufficient to offset the extra cost of labelling.

He said that labelling the circa 90 million products M&S sells annually in Northern Ireland would cost the retailer 9 million pounds ($12.1 million) a year.

Norman also noted that under the proposals a vet would need to oversee certification of 95% of product volume sent from the UK to Northern Ireland.

“This adds cost and a minimum of 4 hours per day into the supply chain which – with the other delays – means goods will take 1.8 days (45 hours) more to get to store than prior to the UK’s departure from the European Union,” he said, adding that the product range available for consumers would be impacted.

Norman said the best solution is for Britain and the EU to agree a time-limited equivalence arrangement.

Frost said on Wednesday Britain’s preference is to strike a deal to improve post-Brexit trade arrangements for Northern Ireland and that the agreement can be reached by Christmas.

Norman’s letter to Frost was first reported by the Financial Times.

($1 = 0.7412 pounds)

(Reporting by James Davey in London and Juby Babu in Bengaluru; Editing by Cynthia Osterman and Stephen Coates)