Percy Pig became one of the first victims of Brexit paperwork, with Marks & Spencer warning that the famous pink candies he sells in his Irish stores could face new import taxes.
The best-selling sweets are among the more than 2,000 products sold in its food halls covered by the “rules of origin” rules defined in the trade agreement concluded with the EU. The rules determine whether import taxes, known as tariffs, must be paid based on where the product’s ingredients come from and how it is made.
Steve Rowe, CEO of M&S, gave the example of his successful Percy Pig candies, which are made in Germany and brought to the UK before being re-exported to Ireland – a journey that would now be subject to import taxes.
“About a third of our food business’s products are subject to complex component rules of origin and their quantity has been changed in the UK,” Rowe explained. “Depending on that, there is a variable tariff rate on the goods. Free doesn’t seem like it’s priceless when you read the fine print. ”
The UK’s free trade agreement spared Marks & Spencer’s domestic operations from tariffs, but would have “a significant impact” on the retailer in Ireland, where it has 18 stores, as well as in the Czech Republic and in France. The “scope and complexity” of the new rules meant that M&S and other retailers would “have to find an expensive workaround,” Rowe said. The rules of origin do not affect products sold in its stores across the border in Northern Ireland.
The British Retail Consortium said at least 50 of its members face potential tariffs for re-exporting goods to the EU. William Bain, BRC’s trade policy adviser, said he was trying to come up with short-term options and “was looking for a dialogue with the government and the EU on longer-term solutions to mitigate the effects of the new tariffs. “.
He added: “We need a solution that truly reflects the needs of the supply and distribution chains of goods between the UK and the EU.”