Lidl has reassured suppliers they will not have to shoulder ‘all additional costs’ of a no-deal Brexit, following reports they would be expected to pay EU tariffs.
The discounter’s UK chief commercial officer Ryan McDonnell has written to British suppliers exporting to Lidl markets across the EU saying they will not be expected to bear the ‘full financial burden that may arise’.
It comes after Lidl Ireland wrote to British suppliers reminding them of a ‘delivery duty paid’ contract clause requiring that they cover transport costs including tariffs. The move was taken as an indication that the suppliers were expected to pay EU import tariffs for goods delivered to Ireland.
But McDonnell’s letter, dated 23 August, said: ’I understand that the communications from my colleagues may have been open to misunderstanding.
‘Much of this is due to the delivery duty paid clause in our contracts.’
He said suppliers would not be expected to pay all additional costs in spite of the clause, and that contract terms would be reviewed to make them fit for new UK-EU trading arrangements.
‘This clause has always been included in our standard contracts and does not mean that we expect you, our supplier, to shoulder all additional costs in the event of a no-deal scenario.’
McDonnell’s letter acknowledged that Brexit could mean ‘new challenges or costs that neither we or you anticipated’ when contract terms were agreed.
As a result: ‘We will be reviewing and, where appropriate, adjusting them to be fit for purpose as soon as the new UK-EU trading arrangements are known.’
Lidl Ireland made headlines after writing to British suppliers asking if they were ‘delivery duty paid-ready’.
McDonnell’s letter of the following week began: ‘You may have seen reports about Lidl Ireland’s plans for its preparedness for a no-deal Brexit. The reporting did not reflect our position or the communication that we have had with you directly on this topic over recent months. Therefore I’m writing to you to provide reassurance…’
’We know that the financial challenge of exporting to EU markets in the context of a possible no-deal Brexit is not just about tariffs - there are also brokerage and administrative costs. We fully understand that this could have a significant financial impact on you and that is why we have never expected you to carry the full financial burden that may arise from a no-deal Brexit.
‘Where we can, we will directly absorb some of the costs and will continue to work in partnership with you to find ways to minimise as many of the overall costs as possible… We are fully committed to continuing to work in partnership with you in this respect to help manage what is an uncertain situation.’
On the letter from Lidl Ireland, McDonnell added: ‘The intention of the communication from last week was only to query whether suppliers have all the necessary logistical arrangements in place to continue delivering goods after 31 October, regardless of the Brexit outcome.’