The Northern Ireland Protocol is adding costs and complexity to businesses that risks reducing choice and increasing prices for consumers, while cutting trade with Great Britain, MPs have been told.
Representatives from the hospitality and retail sectors told the House of Commons’ Northern Ireland affairs select committee they faced a “perfect storm of Protocol and pandemic”, with one saying the protocol had created “much more than teething problems – it was like wisdom teeth removal”.
A major food supplier said the trading arrangements were “like peeling an onion”. “The more you peel the more you keep crying,” he said.
Businesses on both sides of the Irish border have been struggling to adapt to the implications since the turn of the year and the end of the Brexit transition period on January 1st.
Under the Brexit deal, Northern Ireland remains part of the EU customs area, effectively moving the border to the Irish Sea. The Protocol is an agreement managing that process and requiring a host of new checks and procedures to protect the EU single market.
Last week the UK government announced that it was unilaterally extending the “grace period” before new customs checks on goods sent to NI from GB would be applied for six months.
The European Union responded this week by beginning legal action against the UK.
Andrew Lynas, the managing director of food supplier Lynas Food Service, told MPs that changes to trading rules since January had cost the company around £50,000
“We can suck up that cost, but many businesses can’t and at some point the end consumer will have to pay for it in some degree,” he said.
Mr Lynas said importing mozzarella from a long-time British supplier now involved eight different bureaucratic processes, and that the cost of veterinary checks for his GB suppliers on a single pallet of goods sent to NI can exceed the value of the goods.
“We have contracts for school meals and I have a [GB] supplier who has told me he’s adding £150 to the cost of every load to cover his admin costs,” he said.
“The cost of groupage [freight loads containing more than one product] has doubled. We have got so many suppliers saying ‘it’s really hard work to deal with you now.”
Mr Lynas told MPs his business has stopped using the GB-NI ferry route between Cairnryan and Larne in favour of routes into Ireland via Dublin and Rosslare.
He said if the practical issues are not resolved, doing business with British companies will become unviable for companies on the island of Ireland.
He added: “We will react and respond by what we are thrown by the Protocol, but the outworking of that will be an all-Ireland, pan-European supply chain.”
Colin Neil, chief executive of Hospitality Ulster, said action was urgently required ahead of the reopening of the economy later in the spring.
“We won’t starve if it [the Protocol] doesn’t change, but there will be less choice, higher wastage and higher costs,” he said.
Glyn Roberts, the chief executive of Retail NI, said he hoped John Lewis would resume sending goods to NI customers soon, but that businesses had faced a huge burden of red tape and cost.
“I’m careful with this phrase ‘teething trouble’. It was much more than teething problems, it was like wisdom teeth removal,” he told MPs.
He urged the government to listen to business and work with the EU to find practical solutions to the onerous checks required under the Protocol.
“Ultimately it’s about ensuring that hard-working Northern Ireland families don’t pay more for their groceries and can get their parcels,” he said.
“We have the EU exit deal that the UK government wanted, it’s not the outcome that I’d have wanted or our members would have wanted, but we are where we are and we have to make the best of a difficult situation. We didn’t want this Protocol.”