Brexit “proof of origin crisis” threatens £5.25 billion hit to ecommerce sales

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.

READ MORE: Amazon stops selling alcohol to Northern Ireland amid Brexit chaos

“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.

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4 Comments. Leave new

  • lance Brown
    March 9, 2021 1:08 pm

    This situation is as costly for exporting to the EU from the UK if your goods have come from China originally, everyone thought that a free trade deal meant free trade deal as a result we now have paid duty into the UK and now need to pay duty into the EU at the sales vale so effectively triple duty a crippling tax for the European consumer as you need to add it the cost price.

    Also the hoops you have to go through to get your goods into the Eu if you are selling on an online platform are prohibitive you need VAT registration in every EU territory and then require an importer of record which are not easy to find

    Four years both sides had to sort this out, totally irresponsible way of treating peoples livelihoods and jobs let alone trade growth.

    I could go on for another hour on this subject

  • Jan Vandevijvere
    March 9, 2021 5:37 pm

    A free-trade agreement is not a free-for-all agreement. We can’t help it if this was misunderstood.

    Allowing the UK to freely export goods made in China to the EU would amount to allowing the UK to sell back-door access to China. This is something the TCA was specifically designed to prevent.

    The administrative burdens mentioned are one of the main reasons the EU Customs Union is such a good idea and why it would have made sense for the UK to remain in it. Apparently other considerations were deemed more important than trading convenience.

    Sorry sir, welcome to Brexit.

    • Apparently it’s not working out too well for flower exporters in Belgium and the Netherlands either. Previously flowers from there were rubber stamped “Disease Free”. Now they’re being properly inspected and turned back if infected.
      Welcome to Brexit indeed Jan.
      P.S. Had your coronavirus jab yet from your incompetent bureaucrats?

  • Observer of the Zeitgeist
    March 14, 2021 9:43 am

    Just a small point about the article – 35% of retailers does not necessarily equate to 35% of sales.
    If, among those 35% of retailers, you have Sainsbury’s, Tesco, M&S, Morrisons, Asda, etc., very quickly the problems of the top 35 retailers, rather than 35% of retailers will become widely known and shared.


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