Marks & Spencer’s Percy Pigs are among the first victims of Brexit red tape and tariffs
- Exports of the popular Marks & Spencer’s pink sweets hit by new paperwork
- Sweets are manufactured in Germany and distributed from the UK to Europe
- Under government’s new trade deal the system may trigger a tariff
Percy Pig fans are among the first victims of Brexit red tape and tariffs.
Exports of the popular Marks & Spencer sweets to stores in Ireland, France and the Czech Republic have been hit by new paperwork and potential charges brought in when the transition period ended last year.
The problem stems from the fact that the sweets are manufactured in Germany and sent to M&S, which then distributes them around the UK but also to its outlets in Europe.
Fans of Marks and Spencer’s Percy Pigs may be disappointed as exports of the sweets have been hit by new paperwork and potential charges
Under the Government’s trade deal with the EU, this pattern of importing products made overseas then exporting them to Europe may trigger a tariff. M&S chief executive Steve Rowe said the issue applies to around one third of the company’s food products and threatens to add significant cost and complexity to business.
The British Retail Consortium said at least 50 of its members face generating potential tariffs for re-exporting goods.
Its trade policy adviser, William Bain, said: ‘We need a solution which genuinely reflects the needs of UK-EU supply and distribution chains for goods.’ Other retailers, including John Lewis and TKMaxx, have identified similar problems – and have suspended some of their European sales as a result.
At the company’s Christmas trading update, chief executive Steve Rowe explained the sweets are a typical example of the problems facing retailers.
He said: “Essentially, there is about a third of the product in our food business that is subject to very complex rules of origin arrangements, around the components within it, and how much has been altered in the UK.
“Depending on that there is a variable tariff.
“Any product that’s manufactured in Europe, comes to the UK and is then redistributed to somewhere like Republic of Ireland also, potentially faces a tariff.
“So, the best example is Percy Pig is actually manufactured in Germany, and if it comes to the UK and we then send it to Ireland, in theory, he would have some tax on it.
“So we’ve got a lot to do in terms of composition and rerouting, but it’s really important that we continue to be focused on trading the business.
“And, at the moment, making sure we’ve got constant continuity of supply in our Irish business.”
The British Retail Consortium (BRC) said that “at least 50” of its members face potential tariffs for re-exporting goods following the agreement of the Trade and Co-operation Agreement (TCA).
It comes as Marks & Spencer is poised to snap up upmarket fashion brand Jaeger following the historic firm’s collapse last autumn.
M&S is understood to be in the final throes of sealing a deal to buy the fashion house, which has been worn by A-list stars – including Audrey Hepburn – and royals alike during its stellar 133-year history.
Jaeger was placed into administration alongside sister firm Peacocks in November by Dubai-based owner and retail billionaire Philip Day.