Re-exported products causing tariff and Rules of Origin issues for retailers

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Retailers in the UK have warned the government that supply chains and trade flows are being affected by new post-transition customs and trade requirements. 

M&S was one of the first retailers to take action by temporarily suspending sales of hundreds of items in Northern Ireland stores as it fears food would be blocked due to new rules. Many other firms have spoken out about delays fuelled by increased paperwork at ports too. 

The trade agreement between the EU and UK was designed to preserve zero-tariff and zero-quota access, but retailers which use the UK as a distribution hub for EU business operations are facing the possibility of tariffs when re-exporting goods back into the European Union. 

The most prominent example so far has been M&S’s popular Percy Pigs which is manufactured in Germany, shipped into the UK and then exported once more into Northern Ireland – something which chief executive Steve Rowe suggests should, under the new trade agreement, incur tax. 

“Tariff-free does not feel like tariff-free when you read the fine print,” he told Reuters.

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

Read more: 5 issues UK businesses face despite the UK/EU trade deal

Elsewhere, John Lewis has said it will scrap overseas deliveries into the EU due to confusion surrounding post-Brexit trading rules. Debenhams, Fortnum & Masons and ASOS are just three further examples of UK retailers suspending deliveries onto the continent. 

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