Are we facing bare shelves after Brexit?

Are we facing bare shelves after Brexit?

Possibly, because supermarkets do not stockpile, but medicines will not go short, because backup is built into the supply chain says John Hearne.

Deal or no deal, Brexit is already impacting on Irish consumption patterns.

Predictions that 100,000 jobs may be lost as a result of a disorderly British exit from the EU have left us all in a gloomy frame of mind.

The most recent KBC/ESRI consumer sentiment index dropped to 77.2 in August, a substantial slump from the 85.5 of July.

The index is now at a six-year low, as the odds shorten on a no-deal Brexit.

One in four consumers now expect their financial situation to worsen over the coming year, with only one in eight anticipating it to improve.

The good news

Are we facing bare shelves after Brexit?

The good news — if you can call it that — is that both the government and the private sector have been busy preparing to ensure minimum disruption.

First of all, medicines. There has been a great deal of speculation about medicine shortages as a result of Brexit.

The Department of Health says not to worry.

Yes, some of our medicines are moved through the UK, but when the UK leaves the EU, we’re “highly unlikely” to face an immediate medicine supply shortage.

This is because additional stocks of medicines are routinely built into the Irish supply chain.

Healthcare arrangements between Ireland and the UK include the Cross Border Directive, the Treatment Abroad Scheme, and the European Health Insurance Card.

Both Irish and UK governments are committed to these arrangements.

Stockpiling fears

Are we facing bare shelves after Brexit?

The department is also warning people off stockpiling medicines ahead of Brexit, for fear of disrupting existing stock levels and hampering the supply of medicines to other patients.

Now, groceries. Will we have bare shelves after Brexit? This is a possibility in a no-deal scenario.

Most of our supermarkets manage their stocks on a ‘just in time’ basis. They don’t stockpile. Instead, they order and the goods show up 24 hours later.

New checks at ports will inevitably delay things, and these delays will continue until the supply chain adjusts to the new regime.

You can assume that the cost of many household staples will rise in the aftermath of Brexit, deal or no deal.

Many of our foods are processed in the UK, so unless, and until, a new trade deal is worked out, these products will attract big tariffs.

The price of bread could rise by as much as 30%, tea and coffee by 20%, breakfast cereals by 30%, meat by 25%.

The hike on eggs and dairy products could be as much as 40-45%.

Changes to buying online

Are we facing bare shelves after Brexit?

Buying online from the UK won’t be the same, and that’s going to be a big deal for a lot of us.

According to the Competition and Consumer Protection Commission (CPCC), 72% of us have bought online from a UK retailer in the past two years, and 29% of us did ten times or more.

Moreover, 40% of us returned items bought online from UK retailers.

Isolde Goggin is chair of the CCPC. She says that when you buy online from an EU-based business, you can change your mind about the purchase, without a reason, and you have a range of rights.

“When the UK leaves the EU, these protections will no longer be guaranteed when buying from UK-based retailers.

Whether you are a frequent or occasional online shopper, our message is simple: before you buy, check where the business is located and read the terms and conditions on the website.

“Be sure to check, in particular, the returns policy and see if you can return goods if you change your mind. Also, check to see if there are costs for returning items.

"Make sure you are happy with these, before you purchase anything.”

Currently, when you buy from a trader based outside the EU, extra charges can apply and your purchase may cost more than you thought.

According to Revenue, if your goods have a customs value (including cost, transport, insurance, and handling charges) of €22 or less, you don’t have to pay customs duty or VAT.

If the intrinsic value (the value of the goods alone, excluding transport, insurance, and handling charges) is more than €150, then you will have to pay customs duty, as well as VAT.

So, before ordering from a UK trader, or any other trader based outside the EU, check what VAT or import charges you may have to pay on top of the original cost.

If you buy a product from a physical store in Ireland, your contract is with that seller and any request for redress (repair, replacement, or refund) should be made directly to that seller.

In such cases, your consumer rights will not change because of Brexit, even if the owner of the chain or brand is based in the UK.

What about alcohol? Drinks companies, like Diageo, have said that Brexit will cost them millions.

It is unlikely that they will hold onto these costs.

And when the UK leaves, duty-free sales will return.

Those who travel between Ireland and the UK will be able to avail of cheap booze and cigarettes at ports and airports.

The price of cigarettes could fall to as little as €3.

Air travel

Are we facing bare shelves after Brexit?

The EU grants protections to air passengers in the case of flight cancellation, delayed flights, and/or denied boarding.

Known as Regulation (EC) 261/2004, this protection applies to all passengers travelling on flights leaving the EU, Iceland, Norway, or Switzerland, regardless of where the carrier is based or the destination airport.

It also applies on flights arriving into the EU, Iceland, Norway, or Switzerland, regardless of the departure airport, but only if the carrier is based within the EU.

So, if you’re travelling with an EU-based airline, you’ll continue to enjoy your EU air passenger rights, regardless of whether you are travelling to or from the UK.

On the other hand, if there’s a hard Brexit, EU passenger rights won’t automatically apply to passengers departing from a UK airport to an airport situated in the EU/EEA, unless the operating air carrier is a community carrier.

Unfortunately, it’s still unclear if the UK will continue to apply Regulation 261/2004 if it becomes a third country in the event of Brexit and, if so, on which terms.

Switzerland chose to ratify this legislation, even though it is not a member of the EU/EEA.

Since the 1970s, the EU has adopted over a hundred directives and regulations with a consumer protection angle.

Proof, if it were needed, that the potential consequences of Brexit for consumers are far-reaching.

When it comes to things like roaming, geo-blocking, online content portability, data protection, product safety, and enforcement co-operation, we still don’t know what will happen.

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