British supermarkets may shift supply chains to EU if N.Ireland trade not addressed

LONDON, July 18 (Reuters) - British supermarket groups,
including Tesco, Sainsbury's and Asda, said on
Sunday they may shift some supply chains from the UK to the
European Union unless the future of Britain-Northern Ireland
trade is addressed urgently.

Current post-Brexit trading arrangements between Britain and
Northern Ireland are governed by the Northern Ireland protocol.
This was designed to strike a balance between keeping open the
province's border with EU member Ireland to protect the 1998
Good Friday peace deal, while stopping goods entering the EU's
single market unchecked across that frontier.

The protocol keeps Northern Ireland inside the EU single
market for goods, but this requires controls on goods arriving
from mainland Britain. A grace period ends in October.

The CEOs of the three grocers, along with the bosses of
Marks & Spencer, the Co-operative Group and
Iceland, wrote in a letter to Britain's Brexit minister David
Frost and European Commission vice president Maros Sefcovic that
from October, unless a solution is found, they will face
increased cost and complexity when moving goods from Britain to
Northern Ireland.

This would be because of increased checks at Northern Irish
ports, additional paperwork requirements, and the need for
Export Health Certificates on products of animal origin.

"The challenges this will create in sourcing could force
many retailers to move supply chains from GB to the EU," they
said.

Last month, the EU agreed to a ceasefire with the UK in a
dispute dubbed the "sausage war" by extending a grace period for
shipments of certain meat products from Britain to Northern
Ireland.

“Much more needs to be done before the end of September if
there is not to be significant disruption to supply and an
increase in cost for Northern Ireland consumers," the CEOs said.

They want talks with the UK government and the EU.

“Without swift, decisive, and cooperative movement on this
issue there will be disruption," the CEOs said.

They said possible solutions include a veterinary agreement,
a wider Sanitary and Phytosanitary (SPS) agreement, a
facilitated movement scheme or a Trusted Trader scheme.

The letter was coordinated by industry lobby group the
British Retail Consortium.
(Reporting by James Davey. Editing by Jane Merriman)