Brexit threatens to leave a £5.25 billion “black hole” in ecommerce sales as tensions between Brussels and London escalate dramatically.
The EU has threatened to sue the UK after de-facto Brexit minister David Frost moved to extend the transition period on customs check in Northern Ireland without consulting his counterparts in Brussels, while accusing them of sulking over Brexit.
This move means that there will now be no new checks on supermarket goods, parcels or medicines moving from the UK to Northern Ireland for six months, aimed at helping businesses adapt to the new rules.
This escalation in tensions, which the Cold Chain Federation logistics lobby said was
“terrible for food supply chains”, comes as a new report lays bare the potential impact of upcoming increased red tape.
According to a new study from international delivery specialist ParcelHero, Brexit is likely to drive a 35 per cent decline in sales of products sources outside the UK.
“The Government’s Brexit rollout is going to hell in a handcart,” ParcelHero’s head of consumer research David Jinks said.
“The Prime Minister must return to the negotiating table to sort out the escalating issues facing the UK’s beleaguered retailers.”
The study suggests the “crisis around proof of origin” means 35 per cent of all UK retailers importing from the EU are experiencing major problems, potentially leading to a corresponding 35 per cent drop in sales.
While goods manufactured entirely inside the EU attract no customers fees when being imported to the UK, any goods coming from the EU which were manufactured elsewhere do not qualify as tax-exempt.
Even items which have individual parts manufactured outside the EU will incur costs, which fashion giant Asos estimates will cost it £15 million in tariffs this year alone.