Food and drink companies are set to quit Northern Ireland en masse because of “the added cost, complexity and trade friction” of doing business after Brexit, Boris Johnson’s government has been told.
In a letter sent to cabinet ministers, the leaders of 39 good and drink industry bodies say the prime minster’s Brexit deal means it will “no longer be practical for many of our businesses to supply good from Great Britain for sale in the Northern Ireland market”.
After Britain’s Brexit transition period ends on 31 December, new border controls will be imposed on goods moving between Great Britain and Northern Ireland.
The change, agreed by the prime minister last year, will see Northern Ireland continue to follow the EU customs code and other regulations while the rest of the UK diverges.
The letter, which was first reported by the Business Insider website, says unless checks are minimised in ongoing talks with the EU then many companies will simply have to stop supplying the Northern Irish market.
“Producers are now preparing for this worst-case scenario and many are planning to stop supplying the Northern Ireland market after 1 January 2021 while they assess if it remains a viable option for their business,” the warning, sent to Michael Gove, the Chancellor of the Duchy of Lancaster, and George Eustice, the Environment Secretary, says.
The intervention presents a difficult situation for the government, which has already shredded EU goodwill in trade talks by trying to water down controls across the Irish Sea with its Internal Market Bill.
But the government’s plan – which the EU has rejected – only seeks to water down controls in the direction of Northern Ireland to Great Britain, meaning it would not make life easier for companies wanting to export to Northern Ireland.
While implementation of the Northern Ireland protocol is still subject to negotiation at “joint committee” sessions between the EU and UK, controls on the Irish Sea are a fundamental part of what was agreed in the withdrawal agreement and are unlikely to be avoidable.
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The EU says checks are needed ion entry to Northern Ireland to prevent it being used as a staging post for smuggling into the wider EU’s single market and customs union, which it would retain free access to through Northern Ireland.
The 39 signatories include leaders of the Food and Drink Federation, Retail NI, the Northern Ireland Food and Drink Association, UKHospitality, the Fresh Produce Consortium, the Federation of Bankers, the Federation of Wholesale Distributors, the Food and Drink Exporters Association, the British Soft Drinks Association, and the Scotch Whisky Association.
