Draft Brexit deal welcome; Challenges for retailers remain

Tuesday, 20 November 2018
Retail Ireland, the Ibec group that represents the sector, has welcomed the draft Brexit withdrawal agreement as a very important achievement that establishes the potential for an orderly UK withdrawal from the European Union. However, the group warned that enormous political hurdles remain before a deal is ratified and until then retailers must continue preparing for a potential ‘no deal’ Brexit.

The warning comes as the group today launched a new Brexit policy paper entitled, “Brexit: Putting Consumers First” (see attached), that calls on Government to continue to focus on Brexit-proofing the cost competitiveness of Ireland’s largest private sector employer. This includes increased investment in vital infrastructure at Ireland’s ports to ensure supply chain operations remain seamless and additional costs are minimised.

Director of Retail Ireland, Thomas Burke said: “The draft Brexit withdrawal agreement contains very welcome provisions that would minimise disruption to the Irish business community. However, until the agreement is ratified, we are continuing to caution our members as to the risks of a ‘no deal’ outcome. A ‘no deal’ outcome would have devastating economic consequences and must be avoided. The sooner we have certainty around the deal the better.

“Regardless of the type of Brexit agreed over the coming weeks, retailers will see an increase in their operating costs arising from checks at ports and other supply chain disruption. In the current operating environment, these additional costs simply cannot be absorbed by retailers and will have to be passed on to consumers in the form of higher prices. A recent ESRI report suggests that with the inclusion of tariffs and taxes, it could increase the cost of living by up to 3% or €1,360 per annum. Government must do all in its power over the coming weeks and months to minimise this impact.”

In the report, Retail Ireland is calling on Government as a matter of urgency to:
    Ensure a strong focus on cost competitiveness in areas such as labour, minimum wage, energy and insurance costs.
    Existing and planned policy decisions must protect competitiveness and not impose new costs on retailers or consumers; this includes regulatory costs.
    Provide further support for small and medium sized Irish retailers to assist them in capturing the online spend of Irish customers through supports for e-commerce.
    Increase investment in transport projects and the modernisation of our revenue and customs systems must be made to allow for the seamless introduction of new EU custom controls.
    Retain a continuing focus on the ubiquitous presence of black-market products such as illicit alcohol and tobacco products and counterfeit goods.
    Do more to raise awareness of the Future Growth Loan Scheme announced as part of Budget 2019 amongst businesses who could benefit greatly from funding.