Proposed NI Protocol overhaul is high-stakes game for supply chain
A Command Paper has set out the UK Government’s intention to seek a negotiation of significant changes to the Northern Ireland Protocol, prompting reaction from the supply chain industry.
Dave Howorth, executive director of SCALA, has responded to the Government’s desire to renegotiate terms of the deal and its potential impact on meat suppliers.
The paper outlined the reasons why the current regulation is not working in its current form or delivering on its objectives. It further stated that the Protocol will not be scrapped, but significant changes are needed to achieve a sustainable ‘new balance’ which puts UK-EU relationship on a stable footing. This, the paper said, is the only way to ensure protection for all dimensions of the Belfast (Good Friday) Agreement.
Dave Howorth, executive director of the supply chain and logistics consultancy SCALA, has reported “significant disruption” to supply chains between mainland UK and Northern Ireland since the Protocol’s introduction on 1st January 2021.
Whilst businesses now understand the administrative requirements of the trade agreement, Howorth explained, “there are fundamental obstacles associated with some products, most notably sausages and chilled meats due to the UK leaving the EU and its food regulatory standards.”
Howarth said that the need to avoid a hard border between Northern Ireland and the Republic of Ireland, keeping Northern Ireland effectively part of the EU single market, was “at the crux of this issue, and the other challenges associated with the supply of products from UK mainland to Northern Ireland.”
In terms of a resolution, Howorth stated that “the stakes are high.” He continued: “If the UK Government was to press the ‘nuclear button’ and independently refuse to comply, the EU may take punitive action and suspend parts of the wider UK-EU Trade Agreement, which would send a shudder down the spine of supply chain directors across the UK and Europe.”
He continued: “Beyond a potential ‘Sausage War’ it is clear that the Northern Ireland Protocol is forcing businesses to rethink their supply chains. Retailers in Northern Ireland have already switched to more local sourcing. They are experiencing additional cost of supply from the UK mainland and therefore, ultimately, prices to consumers have increased.”