Retailers: “New tariffs are being unfairly applied”

Tuesday 16 March 2021

Retailers in Jersey say they are being unfairly treated because they are being forced to pay Brexit-related tariffs while UK shops don’t have to.

While the UK-EU trade deal, signed at the end of last year, ensured that there would be no tariffs between the two blocs, they do apply if a product is made outside the EU, imported into the Union, and then sent on to the UK or Jersey.

However, retailers have told Express that it appears that while Jersey is applying tariffs under this ‘rule of origin’ provision, the UK is not.

This means that traders in Jersey are being unfairly penalised, they say.

Stephen Arthurs, who owns sports shop Graeme Le Maistre, explained: “Take one of our suppliers, Asics: they used to send us stock from a depot in Manchester but, in preparation for Brexit, they moved it to Germany.

“We are now paying a 16% tariff because the shoes are made in Asia. Fortunately, Asics are covering this but they’ve realised that it is unsustainable so they’re moving back to the UK. 

“Jersey Customs have been helpful but it seems that they, and the other Crown Dependencies, are the only ones applying these tariffs.

“I have contacts in the UK who own sports shops and they’re sourcing exactly the same goods from the same places and not paying a penny in tariffs. 

Pictured: Local retailers are asking why the Crown Dependencies are applying tariffs on ‘rule of origin’ products, where the UK don’t appear to be.

“Maybe we are being squeaky clean and following the letter of the law but it’s hardly fair if no one else is. 

“We’re fortunate in that Graeme Le Maistre is a solid business so we’ll be fine but I don't think anyone could have predicted the hassle. The Government might be benefiting from the extra revenue for now but it won’t last long because already companies like Asics are responding.”

Mr Arthurs added that the increase in paperwork had also been a “nightmare”. 

“The paperwork is unbelievable,” he said. “My poor wife, who handles our admin, has had sleepless nights over it. We already collect GST, Income Tax, Social Security, manpower information and now we’re having to input all the tariff information. Filling in forms for the Government is becoming a full-time job, and we get nothing in return.”

Mr Arthurs’s views were echoed by other retailers, some of whom wished to remain anonymous. 

But Paul Clark, owner of Mypad in West’s Centre, said that although tariffs weren’t a major problem, Brexit had caused a “logistical nightmare”.

“The real challenge has been getting EU-made goods through the UK,” he said. “Brexit has prompted agents to spring up in the UK, who say they will handle all the paperwork and complexities, for a fee.

Pictured: Mr Clark is now sourcing most of his European-made goods through Saint Malo, rather than pay UK agents.

“We’ve just decided to get our European-made furniture straight from St Malo, so cut out the UK completely. It means that there’s only one boat a week and the ferry is more expensive than the UK service but it’s working for now. 

“Our suppliers in Spain, Italy, Poland and Latvia have rerouted their goods to St Malo and the only problem has been with Germany, which is our only European manufacturer who comes through the UK now.

“With the St Malo supply route established, the logistical nightmare has receded although, in time, I think we will look harder at UK manufacturers, rather than ones in the EU. 

“The biggest challenge is that prices have increased across the board by about 8%; that’s not Brexit-related specifically but linked to shipping, labour and other costs. The cost of shipping from China, for instance, has trebled. 

“On some items, we have had to swallow the cost but we can’t do that for everything.”

The Government has been asked for a response on its application of tariffs.