Marks & Spencer is reportedly reconsidering its business in Europe because of post-Brexit difficulties supplying products to EU stores.
Border delays meant food arrived at French M&S stores past its sell-by date or was turned back to British warehouses due to post-Brexit border restrictions, the Mail on Sunday reported.
M&S operates around 20 stores in France with franchise partners SFH and Lagardere, which are primarily situated in Paris, and the company is said to be reconsidering the position of its Paris stores following the supply disruptions.
M&S chairman Archie Norman previously warned “pointless and byzantine" post-Brexit regulations had caused gaps on shelves, with only two-thirds of sandwiches getting to stores before their expiration date. Many sandwiches only have a shelf life of two days, meaning short delays can prevent them from being sold.
An M&S spokesperson declined to comment on the potential French store closures, but did acknowledge how new customs regulations were impacting EU stores.
They said: “In light of the new customs arrangements we are taking decisive steps to reconfigure our European operations and have already made changes to food export into Czech Republic.
“We operate a franchise business in France and are currently undertaking a review of the model with our two partners in the market.”
The company was forced to replace fresh food items with frozen products and products with longer shelf lives in 18 Czech Republic stores after it faced delivery difficulties.
In July, Norman wrote to Brexit minister David Frost to warn current EU customs arrangements with Northern Ireland were “totally unsuited” and said the retailer was no longer able to ship many products into the Republic of Ireland from Great Britain as a result of Brexit agreements. He warned NI would face “gaps on shelves” if ministers were unable to resolve the issues.
In January M&S warned of the “Percy Pig problem”, in which rules of origin meant it and other retailers were facing tariffs on goods shipped to stores in the EU, particularly Ireland, France and the Czech Republic.
Research shows customs duties for UK businesses rose by 42% between January and July 2021 following Brexit trade agreements coming into effect.
The amount paid for by UK businesses rose from £1.6bn to £2.2bn year on year, according to research by UHY Hacker Young.
The accountancy firm said the main increase in customs costs resulted from rules of origin tariffs, which apply to goods shipped to the EU which were originally made, or contain components made, outside the EU.
Michelle Dale, senior manager at UHY Hacker Young’s Manchester office, said: “UK businesses weren’t given enough time or help to prepare for the cost of Brexit or the masses of paperwork.
“The result is that the cost of tariffs and extra paperwork is now causing serious difficulties for many businesses who are already struggling to stay profitable in the face of mounting pandemic-induced costs.”
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