Marks & Spencer Faces Brexit-Related Challenges in Exporting Fresh Produce to Europe 🛄🇪🇺
Britain's beloved retail giant, Marks & Spencer (M&S), blames the post-Brexit export process for the approximately 12 stores it intends to shutter in the heart of Paris by the year's end. These shops are primarily partnered with SFH, a franchise partner.
Paul Friston, the CEO of M&S International, explained in a statement that the Brexit-induced complexity in supply chains now makes it impractical to deliver their premium fresh and chilled goods as expected, negatively impacting the business performance.
M&S started its journey in Paris again after leaving in 2001, reopening its Parisian store in 2011. While the remaining nine stores situated in French airports and train stations, supported by Lagardere Travel Retail, will continue operations, plus the online platform, the extraction from Europe's customs union appears challenging.
After the British exit from France in 2001, M&S implemented a strategy of importing frozen and stable goods instead of perishable products, aiming to reduce waste and ensure predictable supply chains.
The complexity is escalating pressures on supply chains, which are already strained by pandemic-related restrictions and the resurgence of demand for essential supplies. The UK government has announced the postponement of the EU food import controls assessment until July 2022 to provide supermarkets more time to restock.
British food manufacturers and logistics companies attribute the labour shortages, leading to production reduction and delayed deadlines, to the UK's exit from the EU. It is expected that by 2023, the number of commercial truck drivers in the UK will decrease by 100,000, with 20,000 EU nationals being among those departing post-Brexit.
M&S acknowledged that the Brexit structural changes required adapting its European business strategy. In April 2023, M&S announced ceasing the sale of fresh and chilled goods in the Czech Republic, focusing instead on doubling its selection of frozen and resilient products.
Insights from Expert Analysis 💡
The Brexit red tape is posing difficulties for M&S in sending fresh sandwiches and salads from the UK to Europe. The current complexities include:
- Excessive paperwork: The export process includes filling out over 200 forms per shipment, taking up hours of working time. For perishable items requiring rapid transportation, this becomes challenging.
- Export Health Certificates: Around 7,000 products sold to Irish customers require Export Health Certificates, with around £1 million spent annually on veterinary fees.
- Labelling: Food items adhering to EU standards like French Brie and Italian Parmesan must feature "Not for EU" labels.
- Veterinary Agreement: M&S supports negotiations of a veterinary agreement with the EU to streamline the process, reduce costs, and alleviate unnecessary complexity.
- Impact on business: The additional complications introduced by Brexit are leading to delays, food spoilage, and emptied shelves, mainly in Ireland where M&S operates 39 stores.
M&S is not mentioned specifically as having issues with exporting to France, but overall, EU regulations affect their operations throughout Europe, including Ireland, impacting the chain efficiency, customer satisfaction, and costs[1][2][4].
[1] The Telegraph (2023) [2] The Guardian (2023) [3] Marks & Spencer (2023) [4] BBC News (2023)
