A new study conducted by economists John FitzGerald and Edgar Morgenroth for the Irish Institute of European Affairs has examined the impact of Brexit on Irish imports. As more than two-thirds of products on Irish supermarket shelves are either manufactured in the UK or imported through Britain, the administrative burden of customs checks should the UK exit the EU customs union would be incredibly disruptive for the sector.
The retail sector across the European Union is based on a system of centralised distribution channels, with suppliers making deliveries to a central warehouse rather than from store to store. It is this system that is incompatible with customs checks, according to the report. “Where there is some form of custom checks, every different item in a truck will have to be separately identified for customs to ensure that the correct tariff is applied. Some existing retailers, which organise on a joint Ireland-UK basis, may pull out because of the significantly increased costs of supplying the Irish market, and it will also make future, new entry for UK retailers more difficult. If this fails, the Irish Government must assist businesses to develop alternative supply chains.”