M&S chairman warns government against separate labelling for goods sold in NI

Marks & Spencer has warned the government that separate labelling for goods sold in Northern Ireland would heap costs and complexity on businesses.

In a letter to foreign secretary James Cleverly, M&S chairman Archie Norman said the requirement would add “overbearing and prohibitive costs to exporting businesses”.

In talks over possible amendments to the Northern Ireland protocol – the agreement keeping Northern Ireland inside the EU single market for goods – both the UK and EU have suggested additional labelling requirements as a way to reduce the need for checks on goods.

In his letter, Norman argues separate labelling requirements for products of animal or plant origin, subject to sanitary and phytosanitary (SPS) checks, would solve a “non-existent problem” because “the vast majority of these can be covered by a digital solution”.

“Almost all food retailers employ digital traceability and product-tracing digitally obviates the need for physical checks (and labelling) for products intended for the Northern Ireland market, as it provides an unadulterated clear view on where product has been sent,” said the letter.

“Further, assurance can be provided by matching goods moved against waste and sales data. This is very common in the food industry and most retailers demand it for their own food safety and traceability assurance already.”

Norman outlines two variants of labelling proposals, involving either Northern Ireland-specific labels or UK-wide labels.

Both would “incur the same problem for those retailers or manufacturers operating in both Northern Ireland and Ireland”, says the letter.

“Northern Ireland-specific labelling would require specific production runs and segregated stock for about 7%-9% of our volume, incurring cost of packaging changes on every production run (particularly challenging for small suppliers).”

UK-wide labelling for SPS products would be an “even worse outcome for M&S and our Irish and international customers” because it would “require all products for export, notably into the Republic of Ireland, to have separate production runs, packaging and segregated stock”.

The letter goes on: “If we were forced to implement UK-wide labelling on SPS products, we would have to create dual labelling for our products to serve our Irish business.

“That would completely undermine the ‘all Ireland supply’ we have set up to help get around the current issues.”

As a result, warns Norman, the introduction of new labelling requirements would “raise prices and reduce choice for customers”.

“A costly labelling solution will mean customers will be hit by reduced ranges, higher prices – at a time of huge inflation and when the economy in Northern Ireland is already disadvantaged – and a worsening of availability.

“Our other export markets such as the Middle East and Hong Kong where we export SPS products, including ready meals, would also be impacted as we would have to label product for consumption ‘for the UK’.

“This would further limit the competitiveness of the M&S food business overseas but also limit innovation and growth in domestic markets, further squeezing any supply from manufacturers on the island of Ireland.”

Norman also warns it would “further disadvantage UK producers and farmers”.

The letter says: “You will be well aware of the issues around input costs and labour availability in UK food manufacturing, not to mention avian flu and other sector issues.

“This proposal adds cost, labour and complexity at a time when the supply base really does not need it and is struggling to stay on its feet to the specific advantage of EU producers.”

In a comment issued separately to the letter, Norman said: “The overbearing costs of a labelling regime would raise prices and reduce choice for consumers, further disadvantage UK farmers and suppliers and impact UK retailers competitiveness in other international markets.

“The simple fact is retailers already operate in real-time digital information – day or night, at the click of a button, we can locate our products be that in a depot, in transit or in a store.

“In a digital era – when one tap of a mobile can check in a customer at store and locate their order in under 60 seconds, it’s baffling that the government and EU have rewound four decades to discuss an expensive ‘solution’ involving stickers and labelling.”