As the toy community attempts to get to grips with the challenges, one supplier likens the current situation to “cutting the country off overnight.”
Toy World has been contacted by several suppliers and retailers, highlighting significant new logistics challenges which have arisen in the aftermath of Brexit. Most of the problems currently revolve around shipping to Southern Ireland, but there are additional issues that also involve deliveries to Northern Ireland.
‘Impenetrable’ red tape has already resulted in empty supermarket shelves across Ireland, but non-food suppliers and retailers are facing their own set of challenges. In some cases, the time taken to complete paperwork on a lorry load of goods has increased from three hours to five days, and there are concerns that problems could deepen after 1st April, when a temporary easing of border checks will end.
Speaking to Toy World, one supplier listed some of the current issues which have come to light since the UK left the EU on 1st January: “First of all, customers are having to request that any deliveries to Ireland are delivered duty paid. In order to ship items on a delivered duty paid ‘DDP’ basis, with all duty and import VAT paid by the supplier, companies need an Irish VAT registration and a European EORI number – the EORI number can be applied for through various countries. Unfortunately there is a hold-up with VAT registration in Ireland for non-resident businesses, as the Irish Revenue service is asking during the registration process if companies have contracts in place with haulage companies and/or customs representatives.
“This leads to a further issue: it’s currently proving difficult to find hauliers offering a DDP service to Ireland because of problems acting as the customs representative. Suppliers are trying many of the major hauliers and pallet organisations without luck. The only option generally available is called ‘DAP Cleared’, which means that duty is paid by the supplier and VAT is accounted for by the customer – albeit due to the Irish postponed VAT accounting regime, this can be done via their VAT return
“On top of that, there are currently port delays, and suppliers are quoting delivery lead times of sometimes five days or more, while costs have sky-rocketed. We are being quoted three or four times more than we were paying before New Year.
“It’s a real mess and the situation is not helping either UK suppliers or Irish retailers. It is as if Ireland has been effectively cut off overnight!”
Another supplier was concerned over the grey area of what he referred to as ‘double duty’: “Can a UK exporter sending product to Ireland claim back the duty he has already paid when he first imported the product? Otherwise you are potentially paying the duty twice. If that is the case, it is inevitable that prices will rise – and we may end up working from two or even three separate price lists for different territories.”
Toy World also understands that for deliveries to Northern Ireland, UK suppliers are being asked to apply an EU product label on all goods.
With numerous major toy retail businesses located in Ireland, these new hurdles are not helping toy suppliers who are also coping with the latest lockdown challenges across the UK.