Marks & Spencer may buy more Irish goods as it seeks ways to avoid tariff confusion

Brexit trade rules could leave businesses paying tariffs on goods they supply to subsidiaries in the EU

Marks & Spencer in Grafton Street, Dublin. Photogtaph:  Tom Honan

Marks & Spencer in Grafton Street, Dublin. Photogtaph: Tom Honan

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Marks & Spencer may buy more Irish goods as the department store chain seeks ways to avoid post-Brexit tariff confusion.

Industry body the British Retail Consortium this week voiced fears that complex Brexit trade rules could leave businesses paying tariffs on goods they supply to subsidiaries in the EU.

It is understood that Marks & Spencer is considering increasing the amount of products it buys in the Republic as one of a number of options for avoiding potential extra costs and paperwork.

Supermarkets in the chain’s 18 stores in the State already stock Irish products. It is not known by how much the group could increase local purchasing at this point.

Marks & Spencer and Tesco have both highlighted the fact that while British businesses can import goods from the EU at zero tariff rates, tariffs can be levied if those products are exported back to the bloc.

This poses problems for UK retailers which import products from one part of the EU and redistribute them to stores here via centres in Britain.

Steve Rowe, Marks & Spencer chief executive, told reporters on Friday that “any product that’s manufactured in Europe that comes to the UK and is then redistributed to somewhere like the Republic of Ireland” faces a possible tariff.

He highlighted Percy Pig sweets, which are made in Germany but distributed to stores here via the UK.

British retailers face different challenges in Northern Ireland which now has a customs border with Britain to maintain an open border with the Republic.

These include extra paperwork on goods moving between the North and Britain as they go through customs checks.

Tesco confirmed this week that it was in talks with the Irish and British governments to find solutions to the tariff problem. The chain may also raise the issue in Brussels.

Marks & Spencer recently centralised distribution for its businesses in Ireland as a whole in Motherwell in Scotland to streamline this operation.

Mr Rowe pointed out that “tariff-free does not feel like tariff-free when you read the fine print” of the EU-UK trade deal.

“For big businesses there will be time-consuming work-arounds but for a lot of others this means paying tariffs or rebasing into the EU,” he said.